11 Reasons to Buy Now

11 Reasons to Buy Now (Citigroup) | SmartMoney.com: "State of Florida's pension plan"

I think Don Luskin is my newest favorite pundit, he's got a great article about why stocks are a good buy and the media is wrong.

For those of you who have been reading my blog you'll know that I've been saying that there is no reason for panic. I've said that recession fears are overblown and are being mentioned purely to make news.

I don't predict markets or recessions - but it seems like a strange time to have a recession given that we have low unemployement, low inflation, low interest rates, the faster GDP growth in 4 years and record treasury receipts.....perhaps I'm wrong, but it doesn't matter. We are not investing for next year or two years from now, we are investing for the long term and paying attention to the short term when making long term decisions can be dangerous.

Great article by Don, please read it.

Scott Dauenhauer, CFP,MSFP, AIF
949-916-6238
www.meridianwealth.com

2007: The Year of Fluctuation

It has been a year of wild fluctuation in the stock market. Today the market closed at 12,743.44 or 10% off its high of 14,164 set on October 9th - an astonishing drop of 1,421 points in just under 50 days. Of course, this isn't something that is abnormal, on average the market corrects by 10% once every two years. Of course this year has been one of big ups and big downs, at one point the market was up 1,766 points for the year, or about 14%.

For the record, as you can see from the picture to the right its been a wild year. We have had three short time frames with drops of over 700 points, including two of over 1,000. However, if you had looked at the paper only twice this year, once on January 5th and then tomorrow you would think to yourself that the markets are doing ok, not spectacular, but at least they aren't down.

I know that these market fluctuations can make you feel sick to your stomach, but my advice is not to fret. This is normal and to be expected and the price we pay for longer term higher returns. In fact, this is where you make your money.

What? This is where we make our money, are you crazy?

My sanity aside, I am serious. The most important factor in your long term return is not when you got into the market, but how you acted (or reacted) when the market took its lumps. If you panic and sell you'll be just like everyone else and you'll earn a mediocre return.

In a recent article by Jason Zweig he tells us about how poor timing can hurt us, "In 1982 the total value of the U.S. stock market, as measured by the Wilshire 5000 index, was $1.2 trillion. The index has since returned an average annual rate of 13.3% - enough to turn that $1.2 trillion into $28.2 trillion. Yet the value of Wilshire stocks, as of Sept. 30, was $18.7 trillion, meaning investors earned far less than 13.3% a year. Did $9.5 trillion disappear? And how can investors earn less than their investments?"

Jason goes on to explain that investors earn less than their investments because they jump around to much. They buy whats hot and panic out when things get bad - two big no-no's. Jason's advice - invest in the market at a low cost and refrain from trading (except for rebalancing). In other words, don't panic when the market does what it will inevitably do - go down.

My clients have diversified portfolio's, but I know they are still feeling the effects of the current market fluctuation. I know it is hard, but trust me - you are making your money right now by waiting out the short term fluctuations and staying invested for what will eventually come - the upward movement of the world's greatest companies.

If you have any questions, concerns or comments please feel free to call or shoot me an e-mail - I'm always available to talk.

Warm regards,

Scott Dauenhauer, CFP, MSFP, AIF

Humor Break: The Most Effective SpeedBump Ever Built

A little humor for your day. We'll see if these speed bumps catch on!

Scott Dauenhauer, CFP, MSFP, AIF

Seventeen reasons America actually needs a recession

Seventeen reasons America actually needs a recession - MarketWatch

Interesting if not a strange article by Paul Farrell. I'm not one of those people calling for a recession or predicting a recession - mainly because I've learned that attempting to predict the future is like trying to catch rain (or herd cats for that matter). What I do like about Paul's article is that he states that recessions shouldn't be something to be afraid of - they are a NATURAL part of the business/economic cycle, they are in fact healthy.

This is not to say that I like recessions, they are not fun and good people (along with some bad) get hurt. But they are necessary and natural.

I think that the recession word is being thrown around mainly because of the presidential election and because the financial media loves to have something scary to talk about. What is more fun to talk about: historic low inflation, historic low interest rates, historic low employment numbers, record corporate profits, record inflows to the treasury OR the "plunging" dollar, out of whack trade balance, "$100 Oil", "$150 Oil", "$200 oil", Home prices plunging, and the mother of all scary financial talk....RECESSION.

The financial media will always pick the latter.

By the way, what is the word Recession made up of - the term "Recess" which means to take a break.....what's wrong with taking a break every now and then? But let's not force a recession on us just so we have something to talk about.

Scott Dauenhauer, CFP, MSFP, AIF
President
Meridian Wealth Management

The Long Johns

The Market's craziness completely explained in easy to understand language!

Actually, this humorous piece has more truth to it than you might think - parody at its best.

Stocks Today Are a Great Bargain (Ahead of the Curve) | SmartMoney.com

Stocks Today Are a Great Bargain (Ahead of the Curve) | SmartMoney.com

Interesting article by Don Luskin - he thinks stocks are risky....and a good buy. Is he right? No idea, but I tend to agree with him. I don't make short term predictions about the market, but I do believe it will do fine long term and better than bonds.

If you're afraid of the market perhaps you shouldn't be in it, but before panicking and selling out, read this article.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238

Which way to invest once you retire? - USATODAY.com

Which way to invest once you retire? - USATODAY.com

A pretty good article about why you still need stocks in retirement.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238

The Real Reason to Worry About the Dollar (Ahead of the Curve) | SmartMoney.com

The Real Reason to Worry About the Dollar (Ahead of the Curve) | SmartMoney.com

Tired of hearing about the record low dollar? Wondering why its falling? Are you panicking that United States is on the verge of collapse?

If you've watched the media lately you may have heard or seen these above themes - remember that if they didn't scare you they wouldn't have any news. If you want an interesting and well written response as to what is going on with the US currency (the good and the bad in perspective) then click on the above link and read Don Luskin's latest article, it is excellent.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238

Predatory Servicing: The Problems and Remedies

It helps to have a friend in the mortgage business and that is what Jack Guttentag is. Jack is opening up the secretive business of lending as no one before him has.

This article focuses on something I think a lot of us have encountered - bad service from our mortgage provider.

Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com

Ben Stein: No Nightmare on Wall Street

Great article by Ben Stein about the recent sell off in the markets, he thinks its a buying opportunity and gives many reasons why. Though he also says it may take several years before you bear fruit.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238

Guttentag: Wholesale Mortgage Prices..Part II

The Mortgage Professor continues to break open the inner secrets of the mortgage business by explaining "wholesale pricing" and intends to put up a site by Christmas that will allow you to compare what your mortgage broker is telling you to what the marketplace actually is priced at.

I bet the mortgage industry hates this guy!

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238

Buttonwood | To infinity and beyond | Economist.com

Buttonwood | To infinity and beyond | Economist.com

Been told that markets always go up? On average they do, though sometimes they can go down and stay down for a long time. This is called risk and investing in stocks carries the risk that stocks will go down and stay down for a long time. This is why diversification is so important.

Interesting article, don't get me wrong, I'm not being alarmist here. I think stocks are a great place to hold money long term, but you need to understand the risks involved first.

Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238