Tough times don’t last; tough people do. Without a doubt, these are the most challenging times in my 28-year career of helping clients secure and control their financial futures. For the vast majority of our clients, we have the responsibility of managing of their savings and retirement monies. And a significant portion of our clients are business owners. We all are fighting through the devaluation of assets (e.g. housing prices and retirement account values), and the recessionary impacts of business downturns and cash-flow reduction. And we are seeing unprecedented government and regulatory intervention, and criticism from abroad, to which many question if America is to be headed in a new direction…away from capitalism, free markets and self-reliance.
Yes, I have felt your worries, tears, and anger. Media attention has focused some on how much they think they’ve “lost” is these terribly trying times. Investment values might be down 30% or more from the fall of 2007. I’m sorry it may have happened. It’s not your fault. It’s not mine. It happened to every good long-term investor. It happened to Warren Buffett, and it happened to me. The cataclysm of the past year was bigger than all of us. There was no way to see it coming, and there was simply no means of getting out of its way…there was no place to hide.
Yet don’t confuse a temporary decline with a permanent loss. The markets are driven short term by fear and greed. Longer term, we’re blessed with a permanent upward ascent as economies continue to grow. Quite simply, there are more and more humans on this planet that will demand both the necessities of life, and a better future for their children and grandchildren.
And yes, I too am grateful for the trust and confidence you have placed in Sage. I know some may be skeptical, and deservingly so. After all, we all have seen media and political hype, bailouts-bonuses-boondoggles, regulatory oversight failures or denials, and the Madoffs. That is why we’re spending so much time on verification of data, reading transcripts of speeches as needed, and it’s why we highly value the long-lasting relationships we have built over the many years with trusted advisors.
In closing, I trust with the right people doing the right thing, because it’s the right thing to do, this crisis too shall end and we’ll all be in a better place. I find it unacceptable for some who fail to take ownership of the challenges we face, and I agree with what John Templeton considered “among the four most dangerous words in investing…It’s different this time.” I share with you the words of Charles Kindleberger, in his book Manias, Panics and Crashes: “Each crisis…has its unique individual features – the nature of the shock, the object of speculation, the form of credit expansion, the ingenuity of the swindlers, and the nature of the incident that touches off revulsion. But if one may borrow a French phrase, the more something changes, the more it remains the same. “Details proliferate; structure abides.”
Brian M. Loy, CFA, CFP