No matter how wacky things get to the market it’s very, very important that you stay in control that you keep an eye on what you own periodically reviewing what you have. This five or ten minutes together it’s just to calm a lot of people down and put things into perspective.
I started getting involved in the stock market in the early 70s when I became a broker a financial planner in Boston a 100 years ago. So I've been around for all sorts of bull and bare market cycles. What has been really, really trick the last couple of years has been very, very difficult to undress because one of the problems is an awful lot of investors in fact TIA, a crap today did an investor survey relating to cross, it was really a good survey. And an awful lot of people are saying they just don’t trust a lot of people in the financial service. There are great people in the financial service business. Money managers. Am I getting a fair shake? Is my financial planner really out for me? Many of them are by the way, there are very good ones.
I'm sort of on my own. So I want you to just step back and let’s talk about rules of the road no matter how volatile the market will it get, and how you either stops individually or mutual funds or bonds or whatever. I think the one thing I want to make most clear; we’ve been calling this for 20 years maybe more the Dolan slip caution.
Forget the markets for the second, how comfortable do you feel what you own. Can you sleep at nigh? Are you worried about it all the time? Are you checking the papers everyday? Are you calling the financial planner, your broker or you uncle Louie talking about what you own? You're uncomfortable then consider getting more comfortable, maybe getting more conservative and not worrying about every single market imagination.
An awful lot of people again in these volatile times they are concern because they don’t know what they own. They are concern because they haven’t taken the time to learn what they’ve invested. They're concern because they haven’t taken a long term view. They're concern because they haven’t been concern, they haven’t made the effort. Get concerned. Periodic review with your financial planner, understand what you own, understand what you own goes up and down. What do you own that’s influenced by interest rates? What do you own that’s touched by currencies?
Rely on solid research not hot tips. Now I’ll admit to you it’s hard to figure out the information that you're getting from some broker financial services, etc. Some are very good by the way. There's been some bad publicity in the past people are saying stop but they didn’t believe or saying stuff because they formed a relationship in their investment bank in department.
One very good source is and you get it in the library, many large libraries are free, Value Line Investment Survey, a very, very good information. Go with stocks and investments that you know. About the slip caution again, go with investments that you understand. If you understand what they do and what makes them fluctuate then you're not going to feel as wacky as most people do when things fluctuate.
Dory and I do a talk, a presentation all over the country called Boomerangs answering questions in the timely money issues related to baby boomers. And one of the things we talked, I use a boomer as example it was really anybody, two of their primary goals are managing risk. How much money should I put at risk and how much risk should I put at that and distributing assets?
So it’s very, very important, and I know a lot of you don’t even want to talk about money stuff, you don’t want to talk about investing in your portfolio and stuff, I'm going to tell folks start getting interested because if you think social security is going to be a big pension plan you're in trouble. If you think your pension plan is going to be a pension plan be careful.
Over 20,000 people have been laid off because of subprime mortgage mess, they were there rocking a couple of years ago, laid off, things happen. And another thing I think that’s it going to make you feel more comfortable is if you invest regularly. Heck even if your own dividend paying stocks. We’re going to talk about dividend paying stocks in another little video, people like them a lot, again feeling more in control.
Dividend paying stocks, if you invest to dividends and stocks that you own instead of getting a dollar, a two dollar of 50 dollars or a 100 dollar you reinvest in the stock, the dollar comes to averaging by reinvesting the dividends in stocks. Two things you're going to feel better no matter what the market does.
Three, maintain realistic expectations. The stock market empirically historically since the turn of the century about 10% per year. Don’t chase performance steady road in the first play. You’ve heard the stuff diversify in case you didn’t hear me. You’ve heard this before, but all I'm trying to do is calm you a little bit and by the same time educate you. Slow is the best way. Understand what you own, invest regularly, set realistic expectations and take a hand on your own future.
No matter what the market does you know that you're under control because you know what you have and you know why what you have moves. So relax but don’t forget one thing the Douglan slip quotient. Can I sleep at night? Do I feel comfortable with my investments? Pleasant dreams.
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