May 6, 2008

Ross Brown - Financial Markets Update   

Edward Jones representative and NB Rotarian Ross Brown addressed the club with an update on the volatile financial markets.

He shared some recent history from the stock market where from March 2000 to the present, the market has achieved two new all time highs with significant fluctuations downward (-39%) and upwards (+95%).  In '05 and '06, only 10% of the trading days saw a fluctuation of +/- 1% whereas in '08, the percentage has grown to 50%.  It is believed that this volatility is due to the current credit crunch, decreased free lending, increased payments from variable rate loans written in past years and a 20% decrease in real estate values.

Although there is much that is out of the control of the average investor, what can be controlled is to stay diversified in good investments and to not be afraid to invest in a down market.  Other influences on the financial climate is in how it is perceived based on the media reporting.  A recent study of 17,000 stories showed that 85% carried a negative tone and that the highest negative reporting typically comes after a recession and with a market rebound.

Hosting Rotarian:  Ross Brown