At the time of writing this article, all of the stock market indices are down for the past 12-month period, with sub-groups such as technology down significantly. Individual bright spots in the market include dividend and value holdings and, temporarily, cash.

During the course of our regular client reviews, it has been interesting to note that in this time of turbulent markets, the vast majority of our clients have adopted an attitude that is serving them very well indeed. Why is this the case? Well, in our opinion, there are three main reasons.

l) Many of you have worked with your PIPFS/FFG team to build a documented financial plan that includes an analysis of the assets required to produce future income as well as projections for accumulation and tax-efficient allocation of these assets.

2) You have met with your advisor on a regular basis and proceeded with the recommended adjustments to your portfolio, with beneficial results.

3) In addition, many of you have invested time and energy into learning more about your financial picture. In so doing, you have shared information with us that has helped us to chart your course through these choppy waters.

It would be interesting to reflect on just how far some of you have come over the years in terms of the overall understanding of your current and future financial picture, as well as your commitment to focusing on achieving a planned outcome.

What is the current market outlook? As Warren Buffet says, “The market in the short term is under no obligation to be logical; in the long run it has no choice.”

Some of the ingredients for favourable long-term performance include:

l) Eight interest rate reductions by the Federal Reserve since January 200l.

2) Money market mutual funds in the United States exceed $2 trillion, most of which is earning 3 to 4%. We believe that, after taking into consideration both inflation and taxation, you need to earn about 6% just to stay even!

3) Since l956, for every one-month period that the Dow Jones Index has been down, there are approximately three months where it has been up.

It has been an interesting ride through these markets, and we would like to extend our congratulations to these clients for working with us to build suitable and viable financial plans. We also applaud the attitudes they have developed, which continue to serve them in good stead. In closing, we would like to express our sincere appreciation for the confidence you have placed in us by referring us to your family, friends and business associates. Referrals are the foundation of our organization, and we are committed to offering a level of service worthy of your confidence in us.