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MAKING CENTS OUT OF THE NEWS
Blog #15
(April 16th, 2009)
“I” AM NOW PART OF THE PROBLEM
By Tom McAllister, CFP™
I returned last week from a very successful twelve-day cruise on the Tahitian Princess, where I delivered six lectures. Average attendance at each session was 104, an astonishing turnout (since there were only 600 passengers aboard).We were able to receive both CNN and Fox News on our cabin TVs as we proceeded across the Indian Ocean from Singapore to Dubai , so I was able to keep up with the markets and the economic news daily. I also had Internet through my own computer in my cabin. My recent spring newsletter was composed and sent from there. While traveling the world, I stayed well informed on world events..
I continue to notice that the media is reporting every possible piece of bad economic news. I have warned several times this would be the case, but now they are actually creating new bad news to report! Specifically, they have taken the bad unemployment numbers, which are approaching nine percent nationally, and adding to them the number of what they call underemployed people, the part-timers., of which I am a part. Little did I know that when I decided to semi-retire in Sept. 2003, I was causing future economic distress! By definition semi-retirement means I am also semi-employed. Since then I work about 20 hours a week on average, including my business reading and this correspondence. I earn money, I pay taxes, I contribute to the economy. But now, according to the media, I am a subject of concern! Never mind that most people my age (71) are fully retired. Never mind that I am still making significant contributions, I hope, with my blogs and newsletters, lectures, financial planning, and investment management. Never mind that I plan to continue this work as long as I can mentally do it. Apparently, according to the pundits, I should be fully employed and it is the responsibility of the government to make it possible for me to become fully employed. Absurd! This kind of thinking and these efforts to manipulate what are already bad numbers about which all of us should be concerned, diminishes, denigrates and devalues those concerns. (Media reporters - you should be ashamed of yourselves!)
On a more positive note, the stock market managed a 23% gain from its March 9 bottom for the period ending last week. I believe these gains are for real and that the worst is now behind us. However, it would be unusual if we did not have an eight to ten percent pullback while digesting these gains and the continuing poor economic news.
While there are “green shoots” out there in the economy, to quote Chairman Greenspan and now President Obama, the world economy is still struggling: more bad news is surely ahead of us. But the stock market discounts news, good and bad, some six to twelve months ahead. I believe it is signaling better economic news by the end of the year. I expect further market gains as we approach a bottom in the economy, probably by late summer or fall.
With all the rapid changes in our economy and in the investment markets, there are many investors who would benefit from more consistent guidance. We are currently accepting new financial planning and investment clients, and would appreciate your referrals.
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