Time to Panic?

As you talk to people, watch the news, and listen to advertisements, there is beginning to be a feeling of “panic” in the streets, when it comes to investing.  That’s right, you heard what I said, and may even have been nodding your head while reading and saying, “you betcha.” In the past few weeks, I have heard the fear that is present in my everyday conversations. The History Channel ran a segment where “truth detectives” speculated on if there was really gold inside of Fort Knox.  Advertisements are rampant on TV and radio with opportunities to sell your old gold jewelry for cash.  Institutions are selling products promising “guaranteed rates” without fully disclosing the risks, cost, and requirements to benefit from the guarantees.  So, before you go knocking down the doors of Fort Knox, hocking your grandmother’s jewelry from her jewelry box, or selling everything and shoving it under your mattress, let’s take a minute to stop, breathe, and relax.

Each week during our weekly webcast we have the good fortune to speak with Steve Sears who writes a column called “The Striking Price Daily” on Barrons.com.  In a recent conversation with Steve, we spoke of what to do when we start to see a level of fear in the streets.  Steve said that his experience has shown over the years, that when fear hits the public, buying opportunities start to arise.  So, now is a key time to not run and hide, but to look for opportunities.

Now that you’ve taken a breath, here are some things to look for as we enter the fourth quarter.  Companies will start to release their earnings reports.  Additionally, it is important to consider employment and manufacturing data reports.  We need to keep our eye on Europe and watch as they navigate through their financial crisis.  We will watch for data of consumer spending and hope for a good holiday spending season.

But what should YOU do in this time?  First, take another breath.  Now, it’s important that you are in conversations with your financial advisor.  Make sure he or she is actively watching the market and these reports and considering the data as it relates to your portfolio.  You may want to revisit your objectives and take a critical look at your portfolio to determine where your exposure is, and where opportunities may arise.  If necessary, make adjustments.  We live in a world where “buy and hold" may no longer be the best strategy.  If your advisor is not keeping up to date, making moves in your account, and positioning your accounts to adapt to this changing market, then it may be time to start to get advice elsewhere.

The important thing to remember in times like this is not to panic.  Take the emotion out and define your expectations.  Surround yourself with people you trust who are working for YOU.  Ask questions if you don’t understand.  And most importantly, don’t bust in the doors at Fort Knox, cut out a secret hole in your mattress, or raid Grandma’s jewelry box while she sleeping  – let’s let her pass that jewelry down for future generations to enjoy!