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#TBT Fall Newsletter 1998

August 11, 2016

 

For today's throwback, we have a newsletter Nancy wrote for the fall of '98.  For reference, the Dow closed at the end of August that year at 7,539.07.  Yesterday, the closing number for the Dow was 18,495.66.  A lot has changed over the years, but it's also interesting just how much has stayed the same.

 

 

School is back in session. Thank goodness! Anyone with children knows the joy of sending them back to their teachers after a long, hard summer of vacations, summer camp, and swimming.

 

Summer is expensive...especially if you're a two career family or a single parent. It's always a struggle to find something to occupy them and someone to supervise them while you're at work. And what about those endless phone calls that require you to referee a sibling knock-down-drag-out long distance?

 

The beginning of this school year is somewhat bittersweet for me. I'm glad to see my daughter heading back to the grind and a routine that gets her up before noon each day. But I'm sad when I realize this is her last year. She's a senior. Was it just yesterday when we walked her to kindergarten class?

 

In a few weeks, we'll be heading to the big apple and a tour of the campus of NYU. She aims high. It's a good thing we have some things in place that give her this option. Many people don't.

 

It's a great feeling when you can open the door to the world for them. Summer may be expensive, but a college education is like gold.

 

Whew! I'm feeling a little dizzy with these wild market swings. In January, the market hit a high of over 9300. Today, as I write this, it has fallen below the 8000 mark. When we hit 8300, we fit the definition of a market correction.

 

Asia is still in trouble. Russia is falling apart. And everyone seems to be in a panic. Meanwhile, our own economy remains strong. So, is this the beginning of a bear market?

 

Many analysts define a bear market as a decline from the high of 20%. That would put the Dow around 7400.

 

But, I submit that a bear market is a signal of the onset of recession. Recession follows expansion, just like fall follows summer. The stage doesn't seem set for the entrance of recession, though.

 

Inflation is quite low. The economy has not started to overheat. Greenspan is not increasing interest rates.

 

So, what's a body to do? Since I'm not a market timer, I just have to go back to the basics. For long-term investing, stocks are where you need to be. If you're trading stocks on short-term perceptions, I hope you have a riverboat and a gambling license.

 

-- Nancy's New Perspectives Newsletter, Volume 2, September, October 1998

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