Hammer to my own head
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You are correct and if you recall I was not overly positive about China and some of the other Asian countries. I did mention I would only invest by proxy ie. P & G and other Western Companies.
For your interest you may want to read some of the concerns that are being expressed by Chinese Companies , as well as the beginning of ie. manufacturing starting to slide and growth not being realized. I assume you are referencing those postings?Interesting comments by all. Instead of selling at the bottom maybe suggest shorting the market if you are convinced the market is going lower. Use an ETF. As for the money markets, most fund families have an FDIC insured money market account, place the money there. Your clients will be able to sleep better knowing it is insured. Dont buy treasuries because you are over paying right now. The mantra use to be flight to quality when the market goes down, looks like that means big pharma and consumer stocks now
jamesbond…not a bad Mantra at all , has always made sense. Invest in quality and gamble in Casinos. I agree with Bonds as to over paying in the current situation.
Stepped out for lunch and had CNBC on while driving to the Post Office. Sue Herrara was saying..."if you new to CNBC and looking for answers to this crisis, you've come to the right place and we will get you through it"....what a joke. One of the worst things that have happened is the allday market news....worse than the damn fishing buddies someone else was commenting on...
I was just talking to one of my favorite wholesalers who said he did an event with 3 advisors and 60 clients last night about how politics will affect things like taxes and stuff like that.
He said he was shocked that out of the 60 clients, not one person throughout the entire night asked any questions about the current state of the market. Nothing. It was like they are so terrified about all of this, they aren't talking, opening statements, checking accounts online, etc. The sad thing is that I don't see anyway there can be a strong rally until MS and GS and the other problems are sorted out.Snags …I think that there are more than just the Financial Services that are part of this situation. On that note , check out who has bought Bank of Scotland. MotorCoach Industries filing and a lot of other things " bubbling in the pot ". I suspect we may next see some serious issues with Commercial Properties. Just my observations and opinion.
[quote=snaggletooth]I was just talking to one of my favorite wholesalers who said he did an event with 3 advisors and 60 clients last night about how politics will affect things like taxes and stuff like that.
He said he was shocked that out of the 60 clients, not one person throughout the entire night asked any questions about the current state of the market. Nothing. It was like they are so terrified about all of this, they aren't talking, opening statements, checking accounts online, etc. The sad thing is that I don't see anyway there can be a strong rally until MS and GS and the other problems are sorted out.[/quote] Many of my clients are the same way. "I'm not even opening my statements - I don't want to know." I guess this is better than them opening them and second guessing everything we are doing.[quote=bspears]I had a conversation with a retired farmer yesterday. Didn’t come in to change anything, but wanted to know my opinion. He took everything I said and just before he left…he said, you know, its the little guys out here who are the last to know and the ones who are ususally left holding the bag. I made a comment on here a month or so ago about pulling clients out of the market in Aug/Sept/Oct of last year,(those who would listen). Putting in short term cd’s, mmkts, short duration funds, inflation protected bond funds. I also talked with a Vet from Ed Jones who I still consider a good friend and he said he wouldn’t put any money in bonds…(this was Dec 07), he’s free thinker, manages 200 mil and likes his LP, but doesn’t drink the koolaid.
I got hammered by almost everyone on here, saying I was trying to predict the market. Buy and hold is the way, and I'm destroying my clients assets. Bottom line is, I am very skeptical of the research put out by ANY wall Street firm. IT IS IN THEIR BEST INTEREST TO KEEP THE CLIENTS IN THE MARKET, NO MATTER HOW BAD IT GETS. I work for my clients and my clients heirs, not LPL or Ed Jones or Morgan or Wachovia or anyone. All this propoganda about staying in the market spewed by the big firms is skewed towards their self preservation. My good friend at Morgan was telling me a week or so ago.."the lows are in"...the market is on the way up from here. That was 1000 pts ago. He has been advising with Morgan (dean witter before) since 1992 and has a book of 300mil. HE is spewing Morgans research...he is not thinking for himself. Any dumbass can step back and say...wow all these no doc loans for 500k mortgage for two walmart workers....hmmm....is this right. You want 850k for an 800sq ft bungalow in a shady neighborhood....wow what a deal....where do I sign. Greed is NOT good. Talked with another friend yesterday, lives in around Wake Forest. John and his wife want to move back to Jersey. He said when he put his house on the market last Spring, they were told there was 18 month supply for his price point. He was told last week, there was now 42 weeks of supply. They pulled it off the market. It's not going to get better anytime soon...be prepared. [/quote] Funny you brought it back up, spears, because I was actually thinking about your highly entertaining market-timing thread just the other day. So, those of us who believe in buying quality, diversifiying, and holding for the long term have it all wrong? Even your Morgan buddy who is managing a $300 million book? If he's been around since '92, he's had several opportunities to give advice during turbulent markets, and by the size of his book, I'd say he's given solid advice. So the point in your post about the farmer is that none of us idiots have any clue as to where the bottom is (one of the few things about which you're correct), but you feel it's best to react to your clients' fears and at least do something to pacify them? Having taken your clients out of a very volatilve market means little unless you know exactly when to get them back in. And I'll wager that you'll end up missing a huge rally and will significantly underperform those of us who are providing the only advice that is time-tested and true.Clients who want to go to money market funds right now (not liquidating stock and bond positions) need to be told a few things.
First...money market funds are not guaranteed. In fact, one broke the dollar for dollar threshold today. Second. How do we know that the market has hit bottom or that it still has more free fall to go? We don't. If we take your money and put it into MMKT and the market continues to fall, we have stopped the bleeding for now and look pretty smart.....BUT....what if we move out and there is a sudden rebound? We have lost the window of opportunity. Most funds require you to be in the mmkt option for 30 days before getting back in. The market can go up just as fast as it goes down as we have seen today. By being on the sidelines, we may miss the opportunity to rebound and recover. We can dollar cost average into the market at a later date, but again. Who knows where we are on the cycle. It's their choice. Move to the sidelines or diversify and stay in the game. It's our responsibility to make sure they know the pitfalls of all decisions.I found this headline from last May especially entertaining. I hope he’s also wrong about his predictions for stock market returns in future years.
Buffett says risk of financial meltdown has declined But Berkshire chairman also cautions on bank risks, lower stock returns By Alistair Barr, MarketWatch Last update: 5:37 p.m. EDT May 3, 2008 Comments: 218 OMAHA, Neb. (MarketWatch) -- Berkshire Hathaway Inc. Chairman Warren Buffett said Saturday that the risk of a major financial meltdown has declined recently but cautioned not to expect big gains from the stock market in future years.[quote=Borker Boy]I found this headline from last May especially entertaining. I hope he’s also wrong about his predictions for stock market returns in future years.
Buffett says risk of financial meltdown has declined But Berkshire chairman also cautions on bank risks, lower stock returns By Alistair Barr, MarketWatch Last update: 5:37 p.m. EDT May 3, 2008 Comments: 218 OMAHA, Neb. (MarketWatch) -- Berkshire Hathaway Inc. Chairman Warren Buffett said Saturday that the risk of a major financial meltdown has declined recently but cautioned not to expect big gains from the stock market in future years. [/quote] Even the Oracle from Omaha can be wrong occasionally. Maybe we should print this out and show our clients that get upset at us?My clients are happy. You may disagree with me along with your disagreement with Fees, Commissions, the market, Edward Jones…whatever else your bitchin about this week…but the bottom line is they’re happy…and have a good story to tell their friends at the coffee shop when their friends are pissing their pants…and alll Borker could tell them was buy and hold…and Gertrude says “Is he the same guy who was sellin paint at the local hardware store”…
[quote=babbling looney]
BUT....what if we move out and there is a sudden rebound? We have lost the window of opportunity. [/quote]
Like what, an 800 point jump in 2 days?I wonder if your idiot client knows that gold had its worst day in 25 years: http://www.marketwatch.com/news/story/gold-tumbles-most-25-years/story.aspx?guid=%7B767C1A82%2D6873%2D49E6%2DAC48%2D933C4E940035%7DI am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)
Client wants to move whole portfolio of various mutual funds to cash because market is too risky.
Next he wants to know what I think of $50,000 each in gold and silver.
I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).
At first he laughs at me. When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.
The bottom is near and if not we will all be replaced by guys that fish.
Snags…or the client can wait for Government/s to step up and print even more money and take over bad loans or failed companies The Financial Companies that earlier this week were considered " dead in the water " are now the " Belles of the Ball ". Change …what change , oh must be being rewarded ( covering the losses , incompetence and greed ) by the taxpayers. Keep Printing The Money
Don't get me wrong, I don't think this rally will sustain. There's too much crap out there, I think it will take a long time to work itself out. The consumer is already strapped, and if the tax payers are left holding this bag, I think the consumers will be dead especially since home prices are so far down. I do think we ride this rally for a little bit and use it as a time to make adjustments to portfolios as needed (shifting to more conservative investments, getting out of bank preferreds, etc). I also think we should be getting ready for the next leg down. In other words, the government's action is just a band-aid.Snags…or the client can wait for Government/s to step up and print even more money and take over bad loans or failed companies The Financial Companies that earlier this week were considered " dead in the water " are now the " Belles of the Ball ". Change …what change , oh must be being rewarded ( covering the losses , incompetence and greed ) by the taxpayers. Keep Printing The Money
I wonder if your idiot client knows that gold had its worst day in 25 years: http://www.marketwatch.com/news/story/gold-tumbles-most-25-years/story.aspx?guid=%7B767C1A82%2D6873%2D49E6%2DAC48%2D933C4E940035%7D[/quote] And one of it's best..... Most indivduals misunderstand gold. They think it is "rock solid". Well, it is. But, the VALUE is not nearly as solid. Case in point..... Just two days ago I picked up 150K from an older lady (70'ish) that wanted to be "really safe" with some cash she had sitting in checking. We opted for a ladder of CD's. I am not taking any chances, as her time horizon is not that long, and Treasuries, well, you know what's going on with those rates. So we laddered out to about 4 years, at an average rate of around 3.5%. She calls me today and says "oh, B24, did I do the right thing? I am so nervous about this market. Should I have just put it all in gold?" Riiiight. So today you would have 150K, tomorrow you might have 125K, and the next day you might have 160K. 5 years from now you may have 80K or 200K. Rock solid. Why don't we just bet on the price of oil instead?[quote=ytrewq]I am ready to hit myself in the head with a hammer (I suggested someone on this forum do that and I should not have.)
Client wants to move whole portfolio of various mutual funds to cash because market is too risky.
Next he wants to know what I think of $50,000 each in gold and silver.
I calmly and seriously ask if he would be comfortable with potentially experiencing a $50,000 loss in a short period of time (I have no idea what gold will do but I know it can be volatile).
At first he laughs at me. When he sees I am not smiling or joking, he explains that he fishes with some guys that trade stocks.
The bottom is near and if not we will all be replaced by guys that fish.