Archive for: August, 2011


Volatility — The Retirement Killer

August 20th, 2011 by John Anderson – Be the first to comment
Posted in Investing, Market Turmoil, Volatility

Volatility refers to how much stock prices vary over a given time frame, usually a year. The current renewed volatility in financial markets is reviving a lot of unwelcome feelings among many investors—feelings of anxiety, fear, and a sense of powerlessness. These are completely natural responses. Acting on those emotions, though, can end up doing more harm than good.

At its core, the increase in market volatility is an expression of uncertainty. Nobody knows what’s going to happen next. The sovereign debt strains in the US and Europe, together with renewed worries over financial institutions and fears of another recession, are leading market participants flee to what they consider to be less risky assets.

The problem for most investors with a long range-purpose, such as retirement, is that the huge swings in the market can wreak havoc on your portfolio if you’re not prepared.   The events of 2008 left many Americans wondering if they are ever going to be able to retire. Now, with the markets continuing to churn and memories of huge losses fresh in the minds of investors, many are looking for a safe place to park their money while still needing it to grow.

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These Are the Times that Try Men’s Souls…

August 5th, 2011 by John Anderson – Be the first to comment
Posted in Investing, Market Turmoil

Perhaps the situation is not as dire as they were when Thomas Paine penned those words in 1776.  However, with the U.S. stock market falling for eight of the past nine days and dropping 8% during the past week, these are certainly times which test our tolerance to look past the short term. After yesterday’s 5% drop in the S&P 500, the index is now down for the year, and phrases such as “market turmoil” and “global sell-off” are dominating the media outlets.  It is the skilled investor who can stick to her long-term plan in the face of short-term pain.

As a fellow investor, I understand the uncertainty you’re feeling.  We certainly don’t like to see our portfolios fall. We here at Cypress Wealth are paying close attention to the events that are causing a stock market sell-off unseen since the financial crisis of 2008.

Yet our advice to you is: take a deep breath, stay calm, and keep your emotions in check. Restraint can be difficult, but successful investing requires it. In times like these it is important to keep our long-term focus and remember that we are investors and not speculators.  In my opinion, the recent and dramatic sell off is driven more by fear than any real data.  While none of us have a crystal ball and no one can predict the immediate future, there are plenty of reasons to look past the current conditions.  As our last earnings season showed us, most U.S. companies are sitting on solid books with large piles of cash.  The economy while not on fire, is showing slow and signs of growth and will muddle through over the next several months.

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Seven Headlines to Beat the Gloom

August 4th, 2011 by John Anderson – Be the first to comment
Posted in Outside the Flags

Debt crises, sovereign risks, double dips and banking strains: Page One headlines can make for depressing reading these days. But being a smart news consumer—and smart investor—means keeping an eye on the lesser headlines. Here are seven you may not have seen:

  • Robust Growth in Germany Pushes Prices—Analysts see a strong chance that German inflation will head towards 3 per cent by the end of the year against a backdrop of robust growth in Europe’s biggest economy. (Reuters, July, 27, 2011)
  • Brazil Domestic Demand Still Strong—The Economist Intelligence Unit says economic growth in Brazil surprisingly picked up speed in the first quarter, challenging the government’s efforts to cool the expansion. (EIU, July 6, 2011)
  • Japan Retail Sales Top Estimates—Japan’s retail sales rose 1.1 per cent in June, exceeding all economists’ forecasts and adding to signs the economy is bouncing back from an initial post-disaster plunge. (Bloomberg, July 28, 2011) read more »