Roller Coaster Ride

Dear Client

Do you remember your first roller coaster ride? The anticipation you felt as you stood in line with a mix of both fear and excitement? As time passed, you became more and more nervous, with various thoughts racing through your mind, "Will I be safe?" "Do I stay or do I go?" Finally it was time. You took your seat in the car, put on your safety harness, and before you knew it the cars were moving. At first, fear set in, and you asked yourself, "Did I make the right decision?" But as the ride progressed, you began to relax and have fun.

Market conditions in 2009 have been very similar to this roller coaster experience. At the beginning of the year there was a lot of fearful anticipation, but as the year progressed, the markets (and your emotions) have relaxed and rebounded nicely.

As we enter the fourth quarter, let's take a look back at where we were and where we are headed. We began the year rather dismally. After all, the third and fourth quarters of 2008 were some of the worst on record. However, we finished the first quarter of 2009 on an upward trend. In fact, we have seen this upward trend in the markets continue. As each week passes, bad news gives way to good news, with hopes the trend continues. We have learned that a few banks who took TARP funds are in shape to repay those funds; and in fact, a couple of them have already repaid the U.S. Treasury. This is good news for the financial sector. Also, recently we heard Federal Reserve Chairman Ben Bernanke state that this recession is likely over.1

The good news continues as the Consumer Confidence Index, which is a gauge of how consumers feel about the economy, continues to rise. The Case-Shiller Housing Price Index reports that home prices have started to stabilize. This is great news for the U.S. housing sector as it appears that a rebound is probable. Lastly, we have returned to pre-November 2008 numbers in the Dow Jones Industrial Average. It has been a remarkable recovery so far this year, and we feel we are beginning to see light at the end of the tunnel!

As we reflect back on the last 12 months, thoughts of that memorable roller coaster ride come back to mind. At first it was a little scary, but as time progressed, it turned out much better than we originally anticipated. With so much optimism for the future, are you prepared to take advantage of it? If you decided to move to cash and wonder when the right time is to get back into the market, or you would like to review your current wealth management strategy, contact our office today. Together we can discuss your long-term plans and your short-term goals and objectives.

Sincerely,

Dion Gouws, CPA

1 Aversa, Jeannine. "Bernanke: Recession „Very Likely Over.‟" Time Magazine. 15 September 2009. http://www.time.com/time/business/article/0,8599,1923331,00.html.