by Jeffrey M . Orth , ChFC , CASL Investment Advisor Representative
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No one has ever been able to accurately predict the timing of a market decline . Only in hindsight are the experts able to say that the stock market was overvalued at a specific point in time and due for a decline .
Successfully timing the market during a decline is extremely difficult because it requires two near perfect actions – getting out at the right time , which is usually not that hard , and figuring out when to get back in , which is very difficult . The problem is that market trends are not straight lines but are likely to be jagged with bursts of false rallies and then declines on the way down and small corrections and gains on the way up .
There have been thirteen recessions since 1931 . It is important to understand that these economic cycles are necessary to purge excesses . This time it ’ s lending and housing . Each one of these recessions has presented investment opportunities for those with long term discipline .
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Sir John Templeton said that “ the best time to buy is when the blood is running in the streets .” One of the most successful investors of our time , Warren Buffett just announced that he is investing $ 5 billion dollars in Goldman Sachs . As much as anyone , Warren recognizes when something is “ on sale ” and understands that troubling times create opportunities . Warren probably wouldn ’ t invest $ 5 billion dollars if he thought the sky was falling . So while many are running around like Chicken Little , convinced by what they have seen and heard , that the sky is falling , perhaps what we need is more information so we will know that this is just a passing storm .
Jeffrey M . Orth is a Chartered Financial Consultant , a Certified Advisor in Senior Living , and an Investment Advisor Representative , with over 10 years experience as a business and personal planning , insurance , and wealth management specialist . Jeff is available for group lectures and private consultations . Visit his website at www . ifitfinancial . com or call 408.842.2716 .
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FALL 2009 GILROY TODAY 21 |