Hi everybody, I’m glad you joined us. I just got a couple of things in my mind as it relates to what is going on in the market, so it’s not a big long video. But often, a lot of you in our national radio show are entering a bunch of speeches we gave. We gave a seminar at about 4,000 people then we gave a seminar to some financial services professionals.
And a lot of people are concerned about investing in what has been an increasingly volatile market and you recently you know the Fed cut the interest rates by a half of a percent in the market goes up 335 points and that something else happens and the market goes down 50 and often a lot of people are really concerned especially people that are born after night in 1946 and between 46 and 64.
Not that everybody shouldn’t be concerned—the market is not a level playing field. I don’t know what’s going on, I own my mutual funds and my 401k and my 403 (b) and my IRA. No matter how wacky things get in the market it’s very important that you stay in control that you keep an eye on what you own. Periodically reviewing what you have.
Let’s try in 10 minutes together, just to calm a lot of people down and put things into perspective. I started getting involved in the stock market in the early 70’s when I became a broker and financial planner in Boston a hundred years ago. So I’ve been around for all sorts of bull and bear market cycles. What has been really tricky are the last couple of years and very difficult to invest. Because one of the problem is, and often a lot of investors—in fact TIAA-CREF did an investor survey relating to trust, that’s really a good survey, and often a lot of people were saying they don’t just trust a lot of people in the financial service. There are great people in financial service business.
Money managers—I’m getting a fair shake? Is my financial planner really out forming, many of them are, by the way—this is a very good one. I’m sort of on my own. So I want you to just step back and let's talk about a couple of—let's talk about some sort of rules of the road no matter how volatile the market gets, and how you either own stocks individually or mutual funds or bonds or whatever.
I think one thing I want to make most clear to—we’ll be calling it for just for 20 years maybe more, The Dolan Sleep Quotient. Forget the markets for a second. How comfortable do you feel what you own? Can you sleep at night? Are you worried about it all the time? Are you checking the papers everyday? Are you calling your financial planner, your broker or your Uncle Louie talking about what you own?—if you’re uncomfortable, then consider getting more comfortable, maybe getting more conservative and not worrying about every single market imagination.
And often, a lot of people again during this volatile times, they’re concerned because they don’t know what they owned. They’re concerned because they haven’t taken the time to learn what they have invested in. They’re concerned because they haven’t taken a long term view. They’re concerned because they haven’t been concerned. They haven’t made the offer. Get concerned, periodic review with your financial planner. Understand what you own, understand why what you own goes up and down.
What do you own that’s influenced by interest rates? What do you own in terms of touched by currencies? Rely on solid research and not hot tips. We admit to you it’s hard to figure out the information that you're getting from some brokers financial services et cetera, and some of them are very good by the way. I mean, there has been some bad publicity in the past, you know people saying stuff that they didn’t believe but saying stuff because they’re forming a relationship in their investment banking department, one very good source is you can get in the library. Many large libraries are free, value line investment survey. Value line investment is a very, very good information. Go with stocks and investments that you know. We’re back to sleep quotient again. Go with the 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.
Daria and I do a talk, a presentation all over the country called Boomer Angst, answering questions in a timely money issues related to baby bores. And one of the things we talked about using boomers in example or just 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 it at and distributing assets. So it’s very important, and I know a lot of you don’t even want to talk about money, and you don’t want to talk about investing in your portfolio on stuff. I’m going to tell you folks, start getting interested because if you think your social security is going to be a 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 the sub-prime mortgage mess, they were very rocking a couple of years ago, “Laid off, what?” Things happen and another thing I think that’s going to make you feel more comfortable is if you invest regularly.
In fact even if you own dividend paying stocks we are going to talk about dividend paying stocks in another little video because we like them a lot, again, feeling more in control. Look at dividend paying stocks if you invested dividend, look at this, see how simple is this. If you invested dividend and stocks that you own, instead of getting a dollar or two dollars or $50.00 or a $100.00 you’re reinvesting the stock, a dollar cost averaging by reinvesting the dividends and stocks.
Two things you’re going to feel better, no matter what the market does.
Third thing, maintain realistic expectations. The stock market, I'm not talking to bonds—stock market empirically, historically since the turn of a century about 10% through a year. Don’t chase performance, steady road and of our spot. 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 in 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 would you have rules. So relax but don’t forget one thing, the Dolan Sleep Quotient. Can I sleep at night? Do I feel comfortable with my investments, okay—pleasant dreams.
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