Expect Nothing; Place No Bets

The stock market declined again last week, marking the third consecutive week of negative returns.

Many of us have been wondering when the markets would reverse their steady (two years now) upward climb. Such a decline would be natural following any long period of strong gains. A correction is not something to be feared; it is a healthy sign of a functioning market. Trees do not grow to the sky, and stock markets do not rise unceasingly.

There are many factors at work right now that could lead to lower markets ahead. A still-sluggish economy, the procrastination of our governmental leaders regarding the debt ceiling (see article below for more details), worries about inflation, and the results of a prolonged rally are just a few of those factors.

Does that mean that we should expect a bear market? Actually, no. Nor should we expect the bulls to keep running. In point of fact, my recommendation to you -- and my constant personal policy as well -- is to resist the temptation to expect anything at all. I'm not a betting man, and I'm not willing to place bets with my clients' money.

Here's why: The factors mentioned above are all easily discernable to anyone who is paying attention. But, like invisible currents in the atmosphere, there are myriad other influences at work as well. All of those factors -- large and small, visible and invisible -- combine to determine the direction of the markets at any given point in time.

The sentiments and emotions of Wall Street traders and financiers, current events in Washington and Hong Kong and London and Athens and Tripoli -- even events in Tryon and countless other anonymous communities across the globe -- all intermingle to form an ever-changing current that drives the worldwide market.

Nobody can hope to fully understand that current, much less try to predict where it is headed at any given moment. So we don't worry about what we can't change. We just try to position our portfolios for as many possibilities as possible.

Now, consider the amazing fact that we are all part of of the pulsing organism that is the world economy. When you think about it, it really is a wondrous thing -- scary I grant you, but wondrous nonetheless.

Have a great week!

-Andy

     Last week we introduced you to Bonnie Armstrong, who is working with us from her home base in the Washington, DC area. This week we'd like you to meet Libbie Johnson, our new Event Coordinator and Manager of the Depot Room.
     I never fully introduced Libbie's predecessor, Tabatha Cantrell. Tabatha and I have been friends a long time; she agreed to help jump start our Depot Room project when we made the move in January, and I don't know what we would have done without her. She recently left us to pursue other opportunities, particularly in her specialty of private event planning. We are grateful to Tabatha and expect that we will be working with her on future projects.
     And now we have the great good fortune to be joined by another of my good friends, Libbie Johnson. She brings a wealth of experience and talents to her new position. Best known locally for her work in promoting the vital equestrian economy, she also has extensive experience in marketing and event planning. Most important, she is a go-getter with a great sense of humor and can-do attitude.
     Libbie's skills include writing, (her weekly email newsletter, This Week in Tryon Horse Country, is informative and entertaining) and technology (see her two websites, TryonHorseCountry.org and OurHorsesMeanBusiness.org).
     I'll stop here before I get carried away. Suffice it to say that we are excited to have Libbie on the Millard & Company team!