posted by Chris | The first quarter of 2008 has mercifully come to a close with the S&P 500 posting a 10% loss. Much to our chagrin we have experienced back-to-back negative quarters with the 4th quarter of 2007 losing approximately 5%.
Indeed the bull market that we enjoyed didn’t end with the classic large cap stock run up and along with profound investor glee, but rather with multiple shocks coming from the catastrophe that is the credit markets.
In a nutshell, the credit market debacle arose from the proverbial building a house of cards -- and then borrowing on it again and again.
It’s important to note that many Wall Street
commentators have described this as the worse credit environment in the last
30+ years. The melt down of our credit
markets claimed one of the iconic institutions in investment banking, Bear
Stearns -- and there could be more.
The Federal Reserve with Ben Bernanke at the helm, while late to the party, has been very aggressive in 2008 with its actions. I think the Fed assumed a housing correction and didn’t understand the full ramifications of the credit market melt-down ( not sure who did ), but the Fed has since cut the Federal Funds rate 7 times, and has created several other options for big banks and investment banks to access liquidity.
These steps, I believe, will go along way in restoring our credit markets. Is it fixed? No. Are there more problems to face? Probably.
believe that we are turning the corner with this debacle. Please understand turning the corner does not
mean it will end quickly, rather the credit markets will stabilize and some “business as usual” will begin.
The credit market debacle and the issues that I have written on previously all have taken their toll on the stock market. My sense is that the stock markets will slowly start to trend upward through the end of the year.
Remember, this is a big picture process and I feel confident that the 300 point up days and the 300 point down days will continue, as volatility will not be removed from the market until many of the pressing issues have been resolved.
feel that the fundamental reason the stock market will advance is that when
investors are forced to put their money somewhere – the only reasonable
investment at this point in time is the stock market – for the long term
I will continue to focus on our managers and our
What Should You Do?
- Continue to focus on the long view.
- Don’t obsess about the markets – that’s what I do.
- Do tell your friends, family & co-workers about me.
- Call or email me with your questions or concerns
Other Posts By Chris
Other Posts By Chris
Christopher J. Conner
Certified Financial Planner TM
Certified Fund Specialist
5200 W. Newberry Road E-7
Gainesville, Florida 32607
352-225-3132 (Fax) 352-225-3784
Advisory Services offered through Jonathan Roberts Advisory Group.
Securities offered through J.W. Cole Financial, Member FINRA/SIPC
Any statements expressed with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance may not be statements of historical fact and may be "forward looking statements." Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through the use of words such as "expects'", "will," "anticipates," "estimates," "believes," or that by statements indicating certain actions "may," "could," or "might" occur no representations, warranties, or guarantees as to the accuracy or completeness of this information. This is not an offer to purchase or sell securities. Past performance is not an indication of future results.