ARE YOU BETTER OFF TODAY THAN FOUR YEARS AGO?

I have to thank the Romney/Ryan Campaign for giving me the idea of the Title for this Post. Personally, I believe that I am in better shape Economically today, and so many other people are too. Mitt and Paul unfortunately, for them, chose a time frame that was at the height of the Mess left over from the Last Administration as a beginning date. Poor Planning, huh?

Yesterday was the fourth anniversary of the Collapse of Lehman Brothers, on September 15, 2008. Shortly thereafter, (then) President George W. Bush called Key Executives of the Federal Reserve and Treasury, as well as Key Leaders in Congress, to a meeting at The White House. That is when we first heard the term about “Standing at the Edge, Looking into an Abyss”. And, once again, the Impact was Worldwide.

Now, I first started working in the Financial Services Industry in January 0f 1973. Shortly thereafter, the Nation heard about the “Plumbers” breaking into the Democratic Reelection Headquarters, at The “Watergate”. The Country was soon glued to watching Joint Congressional Hearings on TV, virtually each evening. Talk about Uncertainty! We soon heard about the potential Impeachment of (then) President Richard M. Nixon. Obviously, the Stock Markets dropped precipitously, both here and abroad. And, the President ultimately resigned.

So, to me, what happened four years ago, was somewhat, as Yogi Berra once said, “Deja vu, all over again”. It was common in the latter part of 2008 for the Dow Jones Industrial Average to swing some 800-to-1200 points (between the High and Low) in one day. I can remember leaving the office at 3:30 PM one afternoon, and the DOW was UP by 300 points; however, when the Stock Market closedat 4:00 PM that day, it was DOWN by some 250 points. Not only were many Clients panicking; but, at age 62, I was not happy checking my Retirement Plan.  Talk about nerve-wracking!

For people who stayed engaged in the Financial Markets, throughout what we call The Great Recession”, perhaps taking a more “Defensive” Stance (adding Cash, Bonds, Necessities, etc. to their portfolios), they have come much of the way back. Their Investment Plans are in decent shape. So, how did we come back so far?

First, let me acknowledge that The Unemployment Rate is still too high. But, keep in mind that the deeper the Recession, and the longer it lasts, the slower the Recovery will be. So, the slow recovery was to be expected. Also, corporations are cutting expenses by increasing the Hours Worked (by some employees, rather than higher more workers), using more Technology, and Outsourcing Jobs to cheaper Pay Scales Overseas.

The Dow peaked on October 7, 2007 at just over 14,000, bottomed at just below 6,500 on March 9, 2009, and closed at 13,593 this past Friday. Unemployment has come back, but slower than we would like; however, Housing Values seem to have rebounded somewhat (especially in certain areas) and Retirement Plans have come back, at least for Investors who have eased back into the Markets.

Now, this post is not intended to encourage people to go back into the Markets. That’s your call. Rather, I would suggest conferring with your Financial Advisor, if you have one. At least, Review Your Portfolio–which, I recommend you do from time-to-time.

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