Tuesday, June 12, 2012

Old Paradigms vs. New Realities


 In this excerpt from our May 15 New Realities: Investing event, we explore some traditional investing assumptions -- old paradigms -- and contrast them with the new realities of the 21st Century. These new realities require us to recognize that old ways of thinking may no longer apply. Find more educational videos on our YouTube channel: www.youtube.com/tryonite
1 - Here's an object lesson in why you shouldn't pay too much attention to the daily movements of the stock market: On Friday, June 1, the Dow Jones Industrial Average lost 275 points, reflecting (and also causing) fear and trembling throughout the investing world. It plunged a further 292 points the following Monday, indicating that the collective universe of investment wisdom was expecting dark times ahead. But the very next morning marked the start of a four-day rally where the same index rose by 453 points. That rally is expected to continue today. The reason for the upswell is news from Europe that....  

2 - ...But you don't really care about the latest news from Europe, do you? You probably shouldn't. Today's uplifting news swiftly gives way to tomorrow's despair, and then to more exuberance. It's like the shifting winds. What really matters is the tradewind: the general long-term direction. But unlike meteorological tradewinds, we won't know which way this one is blowing until we reach the far shore. We can take some assurance from the fact that the long-term direction has always been positive; try not to let the current storms distract you from that fact. 

3 - Clients: By now you should have received an email invitation to our Investment Roundtable client event with Steve McNamara on July 10. To reserve your spot, you can email Michele at michele@low-stress-investing.com or call her at 859-7001, ext. 2.

4 - In case you were nowhere near Polk County, NC this past weekend, the Blue Ridge BBQ Festival came and went on Friday and Saturday. As has been the case for the last 12 years, I expended many hours and calories managing the traffic and parking for the event. Preliminary indications are that we had the largest attendance in a long time. It seems that several factors contributed: an improving economy and lower gas prices, of course, but perfect weather, free admission until 2:00pm on Friday, and blanket coverage/promotion by WSPA-TV in Spartanburg brought in people from all over the area. The huge crowd led to a few, shall we say, challenges -- but overall it was a wonderful weekend for our community.

Have an awesome  week!

-Andy

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