Market Update

21May10

As you all know, these last few weeks have been very interesting for the global financial markets. The latest debt crisis in Greece and other parts of Europe seems like an aftershock to the 2008/2009 financial crisis here in the U.S. This has created an increase in fear, volatility and uncertainty, and we’ve watched all of the major indices pull back roughly 10%.

Just remember, your 401(k) assets are long term dollars that can and will handle the swings of the markets. More importantly, every crisis creates opportunity. This is not the first crisis we’ve been through, and it certainly won’t be the last. What we are seeing in the markets today will actually be healthy in the long run.

A statistic to consider: historically, 93% of the time after a 10% pullback, the markets will increase over 20% in the following 12 months. We are headed higher, but sometimes you need these pullbacks to create better value and additional buying opportunities.

Two silver linings to this latest debt crisis in Europe, are lower interest rates and lower prices at the gas pump here in the United States. Both of these will help spur the recovery.

Our allocations are set to take advantage of the global and domestic opportunities being created by this volatility. We may add additional exposure to the natural resources sector, if we continue to see a dip in the price of oil. We may also take a position in Europe later in the year, as investors continue selling those markets and creating an opportunity of value.

Please feel free to contact our office if you have any questions. We are here to help and look forward to speaking with you.

Best regards,

Ron Sloy, CFP

Learn more about Ron Sloy.

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