DOLLARS AND SEN$E: What Now?

BY CHRIS HANLY
Investment Consultant, Gary Goldberg Financial Services

The optimism and exuberance experienced during the first quarter of the year seems but a distant memory these days. While the S&P 500 gained nearly 12 percent in the first quarter, it has lost nearly 7 percent from April 2 through June 25. Moreover, market volatility has increased significantly over the past 3 months. As the European saga continues to unfold, and economies around the world feel the impact of a slowing European economy, markets will remain jittery. With reports of China’s economy slowing more than thought, U.S. employment gains slowing, and anxieties over a Greek exit from the Euro zone and Euro currency rising, investors are most likely facing the same question they did last summer: Will markets continue to be volatile? Will there be more trouble in Europe? Should I stay or should I go?

Here’s our take: Europe will remain in the spotlight, as will our own economy. News headlines will continue to point to troubles in Europe, economic slowdown in China, and the potential impact of the so-called fiscal cliff we face if congress takes no action. As this cycle continues, investors can expect continued market volatility that will be filled with stress-induced sell offs and subsequent relief rallies. This is when it becomes critical to have a well thought out, disciplined investment plan. Investors who get distracted by the headlines are most susceptible to making emotion driven mistakes that can cost them dearly.

My first piece of advice – if you find yourself yelling at the TV or business section of the paper, stop watching or reading, you’re just adding fuel to the fire. My second piece of advice is to seek guidance from a professional money manager. Someone who can help identify where you are and where you need to go (financially). Lastly, recognize that no matter how loud you shout, it won’t change a thing. The smartest move you can make is to keep your goals and objectives in focus and keep plugging away. As our founder likes to say: Anyone and everyone who bet against the US in the past 250 years has lost. So don’t despair – this too shall pass.

There are some wonderful companies that pay a superb dividend and have solid growth prospects trading at historically low prices right now. In our view, high quality, high dividend paying stocks are a cornerstone of a well designed long-term retirement investment plan. We have a wonderful brochure “Why Dividends Matter” available for free, just call us or visit our website, www.ggfs.com.

Christopher Hanly is an investment consultant with Gary Goldberg Financial Services in Suffern can be reached at (845) 368-2900 ext. 247 or chris.hanly@garygoldberg.com.