This Time Its Different?

The late Sir John Templeton, founder of Franklin Templeton Investments liked to say, “The Four most expensive words in the English Language are ‘This time it’s Different.’

Is it really?

The National Bureau of Economic Research states that the United States has weathered a recession EVERY decade since the 1920’s.

It is easy to say “This time its different.” Many people are still feeling that way.

However, it is important to keep in mind a few points.

* Financial decisions (any financial decisions) should not be based on emotion.
* Historically, after every past recession, the market has gone on to hit new highs.
* Declines in the market & economy, even our most severe ones, have been temporary.  
* Since 1926, the Dow Jones has had TWICE AS MANY positive returns as negative ones.

Despite more than 12 recessions dating back to 1926, $1.00 invested in the Dow in 1926 would have been worth $2045.00 at the end of 2008.

It was two years ago this week (Oct. 16, 2008), that Warren Buffett wrote his “Buy America, I Am” article in the New York Times.  Buffett encouraged investors to “be fearful when others are greedy, and be greedy when others are fearful.”  Since Mr. Buffett wrote this letter, the S&P 500 Index has gained 29.1% on a total return basis through the close of business on Friday October 8, 2010, according to the New York Times.  

“This time it’s different?”  Warren Buffett didn’t think so. Neither did Sir John Templeton.  Neither should we. Investing is a long term process. Recessions are opportunities.  My job as an advisor is to provide you with a beacon of hope, and see the light at the end of the dark tunnel.

Let me know how I may be of service.  Contact me about the IRA Security Blanket!

Help! My 401(k) Has Fallen – And Must Get Up!  is my new book. It has several ideas and strategies which will help you in your retirement savings journey. Get your ‘Fallen’ 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website – The 5 Biggest Problems With 401(k) Plans – And How To Fix Them.

You may also listen to my weekly radio program – Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well.  If you live in the South Bend, IN area, I specialize in 401(k) rollovers or IRA reviews. You can also follow me on Twitter, Linked In, or Facebook.

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