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Turmoil, Schmurmoil; What Turmoil? September 16, 2008

Posted by shaferfinancial in Uncategorized.
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The newspaper headlines scream it.  Blood on the street.  Wall Street that is.  Truth is, even though this is a risky time, it is not that unusual.  The Dow Jones dropping?  S & P 500 dropping?  Yea, so what?  Companies that made mistakes are being bought or going bankrupt. So what?  I can imagine folks are looking at their mutual funds dropping over 4% in one day, taking a look at their portfolio values and spitting out their coffee.  S & P 500 down over 8% in a month!  Now hear this, many big companies have done poorly for the last 30 years, some going out of business.  This has been a common occurrence, although a bit slower than the last few months.  Banks failing?  Well some, but others are doing quite well, like Bank of America which is on a buying spree (Countrywide, Merrill Lynch).

While those in mutual funds were losing over 4% yesterday, Berkshire Hathaway went up almost 1%. The REIT I own is up 15% in the last year plus 6% dividends.  There are many more examples of companies doing well.

What’s the point?  Become an active investor.  Take control of your finances from Wall Street.  Stop betting on mutual funds (hasn’t your brain told you this yet). Stop reading the headlines and start doing your research.  If you invested $10,000 in the ultra low expense Vanguard S & P 500 mutual fund the first trading day of 2000 you would be looking at a small loss now 8 3/4 years later!

VanguardS&P500-Invested $10K on Jan 2, 2000

VanguardS&P500-Invested $10K on Jan 2, 2000

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