This is the first official week of summer and the weather is HOT! We are also fully into the summer movie season, with lots and lots of prequels, sequels, and movies that are a derivative from successful movies from the past, comic books, or even board games. My buddy Alan and I are planning our summer movie-going so we can see all the science fiction and action adventure offerings our wives won’t go to with us.
Between Battleship and Prometheus, it seems that we will get to see life as we know it threatened in very exciting ways. I have confidence that these will not be such downers that humanity is destroyed (Prometheus is a prequel to the “Alien” movies so we must survive there). To be honest, I am not quite sure why I am so eager to see these movies since CNBC gives me a dose of “the end of life as we know it” every day. And, it seems as if we are doing a sequel to the summer of 2011—you can note my blog at that time, Summertime and the livin’ is easy.
The words that are striking fear into the hearts of investors and advisors everywhere are again, Euro, austerity, euro zone breakup, and economic slowdown. It seems that some are ignoring the warning cries and making money anyway. Of course, the over 2% decline in the markets on the first official day of summer, must give us all pause. The combination of fifteen of the largest banks in the world being downgraded along with other miscellaneous negative news caused the worst downturn this year.
What does it mean for the long term prospects of our clients and our businesses? If I follow the premise that this is a sequel to last year, the markets might be expected to end 2012 flat or nearly so, after a lot of gut wrenching volatility. No fun for anyone.
As I mentioned in the blog last year, our advisors are continuing to do well and their businesses are growing. I believe that because of the market roller coaster, our clients need guidance more than ever. There are no easy do-it-yourself answers for the investing public. Direct bought real estate is largely considered long term, illiquid, and quite uncertain in today’s environment, so making one’s fortune as Uncle Fred did in the ’60s, ’70s, and ’80s is not on most investors’ menu. And of course we all know, as do most investors, that what you have left of cash equivalent or bonds even after modest inflation, is a negative number today.
So to quote an old TV commercial, “what’s a mother to do?”
Fortunately for Alan and my viewing enjoyment, and for the investing public, there is always a hero to conquer the creepy crawly things and protect mankind. The heroes of the end of the world story CNBC is telling are the many professional, caring, and calm financial advisors in this country. Your weapons are discipline, a long term viewpoint, and the many, many high quality varied investment vehicles and programs that can smooth the volatility, improve the odds, and strive for an outcome that fits clients’ needs and expectations.
So, thanks in advance for saving mankind again this summer. I sleep comfortably knowing that even though there will always be a new threat in each sequel, the hero always wins in the end.