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This Ain’t ‘Grease’!!!


Ordinarily I do not write a message during the 4th of July week. This year I feel compelled to write something due to the Greece crisis. How will this affect the markets? How will it affect your portfolio? Should we get out of the markets until thing ‘settle down’?

Every day we hear more bad news about our economy and more bad news from "Wall Street".  No matter how much we believe that the free markets work and how much faith we have in the underlying system there will be stress in our lives about the future. Right now the media has us focusing on Greece. I have written about the media in the past.

Their job is to instill fear as well as promote ‘hot’ markets.

Let’s also keep in mind that Greece’s economy is the size of Rhode Islan’s economy. No offense to Rhode Island.

First of all, to my clients, a few facts about your portfolio and Greece. You have no bonds from Greece. And on a 60% equity and 40% fixed income portfolio you have .012% in Greek equities.  To put it in perspective in a $1,000,000 portfolio you would own $120 in Greek stocks. Remember we have a globally diversified portfolio.

Many of us watch the news and feel we should get out of the markets. There are those on Wall Street that want you trading. They generate tremendous fees when you market time.

 We must refuse to be a victim.

In his book former General Electric CEO, Jack Welch points out that feeling sorry for ourselves in one of the most destructive and energy sapping behaviors you can engage in. yes, it’s unfair that the markets are insane and some people are unreasonable. 

We must accept this for the reality that it is and move on.

Every minute engaged in self-pity is one too many.  In the words of Jack Welch, "Refuse to be a victim". 

Develop a scientific strategy for investing and we believe that the "bad times" will not last forever.  Believe it or not we must also remember that “good times” will not last forever.

The situation in Greece is a short term situation. This crisis, like all before it, will pass.

To succeed in investing for the long term we must own equities…..globally diversify ...rebalance!

Now back to the 4th of July week..

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Comment   |  1 year, 11 months ago from Green Bay, WI