The Cornerstone June 2011 “The War is On!” Between the Bulls and the Bear naturally, with many of the naysayers believing that with the European Union(EU) in disarray, wars on different continents, and the USA so upside down financially that the ”Double Dip” recession promised on television is all but a done deal.  Then there is us – The Bulls- with our cups half-full, seeing opportunity at very turn, dividends at eye-popping levels, cash in money market ready to be spent and corporate earnings at record highs just waiting for the next bout of hiring. So why is there such a disconnect? Most of the investors, traders and economists are very smart people and while it’s not difficult to toss your lot in with one group, it’s very hard to discredit the other. My observation is that a person’s outlook usually depends upon some personal factors, including your age, health, time frame, income/wealth and your political leaning.  It’s interesting that these are the very same factors that we use to develop a personalized financial plan for our clients.  Your age, health and time frame are closely linked, and those with a shorter time frame such as retirees are, of course, going to be more concerned with short-term events and news influenced market moves. The current spat of negative news in our 24 hour news cycle, along with many business programs on TV pushing “trading” strategies, often muddies our thinking, and causes negativity and confusion.  Those with longer time frames usually don’t have the time to watch these shows, or pay attention to these events.  They are working, raising families, and probably don’t pay as much attention as they should, but in general are going to be more positive. More income and wealth would seem to favor the longer-term investors, and they usually tend to be more positive.  The recent events of 2007-2008, really shook the framework of these investors however and there is still a tendency to run for cover when we have small retracements such as this last month.  It will be some time before they fully trust again.  Politics – AH! What can I say? You believe in the politicians in charge and you buy, you don’t believe them and you sell.  The odds are that this is the poorest reason to make decisions because it is emotionally, not factually based. So here is my (short) list of rules for sorting this out:

• First – be an investor, not a trader. Try to look as far out in your time frame as you can.
• Second – The television (and most webs sites) are entertainment. Treat them that way.
• Third – Temper your risk(s) and not take on more than makes you comfortable.
• Fourth – Buy good quality, long-term, tax-efficient, well diversified investments.
• Fifth – Please call us when you are concerned. We appreciate your business and that’s why we’re here.

Phil The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.  *  Stock investing involves risk including loss of principal.