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Oct 6, 2008 1:24 pm

I'm hoping others will want to share useful phrases.

 
" Your money is safe, and you don't have to worry.
 
We've got your portfolio allocated in stocks and bonds. From the report, your estimated yield is about 3%. From here, if the market doesn't go up or down, we are collecting 3%. That money is piling up. 
 
Stocks will go up, we don't know when stocks go up - and they have to, because of inflation (not directly related) - because they represent ownership, and owners get paid about four times the cash rate, they can do about twice what bonds do.
 
When you own cash and bonds, you're a lender. That's kind of like renting a house - you don't have any ownership. Sometimes that's nice, like right now, in some ways, it would be nice not to have that kind of responsibility or commitment.
 
That's why we have the bonds.
 
The other reason we have bonds, and cash reserves, is to cover your spending. At your current rate of spending, we have enough to cover about four years, without ever selling even a little bit of stock into this market. We don't want to hand them over at exactly the wrong time.
 
And this down market is not unexpected - it is worse than I thought - but it is a normal function of markets, and us trying the make the "really big bucks" of an average portfolio return of seven or eight percent over a longer period of time. And the last ten years have been pretty tough for stocks, so we are getting to the point where time - and worldwide inflation - is starting to work on your side to get a better return from stocks.
 
As for the stocks - what is the yield on GE today? Something over 6%. If we just buy GE today, with the market so depressed, and you hold out your hand, you're getting 6% in dividends. If we hold the whole index of large companies, we get a nice yield that goes up as the price of stocks goes down. But we don't just own one stock like GE, we own the whole market, so we eliminate one kind of risk - individual security risk.
 
So your money is safe, and you don't have to worry."
 
 
Oct 6, 2008 6:13 pm

Safe?  Pray you never have to relive this conversation in arbitration.  Must be the stupidest thing I have ever seen.

Oct 6, 2008 6:23 pm

Thanks God I still live in America. I bet I know your vote.

Oct 6, 2008 6:24 pm

put your house in your wifes name because odds are one of us is going to take it up the big one in the near term. it's called a quit deed and it will save your home!

Oct 6, 2008 6:26 pm

Let me help you with your safe pitch.  The index has never has a down 15 year period in history.  If you invest today, I guarantee you in 15 years you will make money!!!!  Guarantee is such a stronger word.  Who do you think my vote is going too?

Oct 6, 2008 6:29 pm

Uh huh, ez. Time to sell our houses and rebuy them,  too.

 
Okay, Primo, you win the boring award. Maybe you are a conservative after all.
 
I notice that my post critical of Bill's got deleted. Now I know why all the smart people here quit. 
Oct 6, 2008 6:33 pm
walking9:

Uh huh, ez. Time to sell our houses and rebuy them,  too.

 
Okay, Primo, you win the boring award. Maybe you are a conservative after all.
 
I notice that my post critical of Bill's got deleted. Now I know why all the smart people here quit. 

 
No, your post is on page 2.  See: http://forums.registeredrep.com/forumposts.asp?TID=7057&PN=2
Oct 6, 2008 6:34 pm

Now I know why all the smart people here quit. 

 
And yet you are still here.  Hmmm.
Oct 6, 2008 6:34 pm

My discussions today. 


 
I have no idea what the market is going to do tomorrow or the next day or in the next 6 months or at any time in the future.  I don't know if the market is going to continue to go down to levels like we had after 911 or worse or if the market will begin a recovery if/when the credit markets begin to function properly again.  I DO know that your account is down.  Everyone's account is down.  We have several choices.  (depending on client's time horizon, risk tolerance and diversification) 
 
Ride this thing out and hope that we are at or near the bottom and that there may be a recovery.  Stay put.
 
Take advantage of a down market and make some investments in sectors and companies that might prosper in a recessionary period. (Especially if the client is younger with a longer time horizion)
 
Put stop loss orders on your stocks and if there is a further decline we have at least stopped the bleeding.   (However if there is a temporary dip, you will have stopped out of your investments and miss any potential gains.)  If the market goes up  and you didn't stop out, we can adjust the stop price accordingly.
 
Move your funds into other funds in the same family to try to take advantage of sectors that might be doing better in this current environment.
 
Move your investments into money market and sit on the sidelines.  Money market mutual funds will allow you to get back into the funds with no further commissions, HOWEVER>>>> some fund will make you stay in the funds for a period of time before reinvesting.  IF we have a market correction to the upside during that period you will miss it.
 
Bond clients:  unless we feel that the underlying company is going to default or cease paying you interest, and who freaking knows anymore, just stay put because there is almost no market for fixed income right now and you would be selling at a low price.  (No one is bidding on fixed). 
 
The decision is yours (Mr. Client) and you need to be thinking of all the upside and downside of any decisions that we make. How much risk can you tolerate and how much time do you have before you need to access your funds?  If you have a 3 to 5 year AT LEAST time horizon I would suggest that you stay invested and possibly even make some purchases.

Also, based on my years in this field (since 1990) I have never seen market conditions like this.   Do you want to go over the options again?
 
 
Hey!! What happened to my avatar.  Jessica Rabbit?
 
Oct 6, 2008 6:39 pm

That's what I'm talking about, Looney.

 
All right, I take back what I said about all the smart people. I don't talk to the media, either.