newsletter
Perception vs. Reality
May 2010
Our newsletter this month is going to focus on perception vs. reality. We have talked for a long time about fear vs. greed, emotion vs. intellect, short term market volatility vs. long term returns and the need and difficulty in managing these emotions. This is just one more way to try to put all of this in perspective.
In March of this year Franklin Templeton surveyed 1000 people across the country and the results were very interesting:
66% of the people surveyed felt the stock
market’s return was flat or negative in 2009
It did not register that 2009 was a really good year for stocks. In 2008 the DOW was down nearly 34%, but in 2009 the DOW was up about 23%. Perception did not equal reality.
60% of respondents thought gold outperformed
stocks over the last 30 years
Again perception vs. reality - stocks performed over 12 times better than gold over that 30 year period.
57% of the people in the survey said they
thought stocks are too risky to invest in
So it isn’t surprising that during 2009 equity funds had a net outflow of $8.8 billion and there is still $3 trillion sitting on the sidelines. That’s 80% higher than the 20 year average of $1.6 trillion.
When asked about their outlook for the future
60% did not think the DOW would pass 15,000
over the next decade and 16% thought the
DOW’s
return would be negative over the next decade
If you do the math – for the DOW to pass the 15,000
mark by
Our job is to shift our client’s focus from short term
volatility to long term performance.
This is something we continually struggle with. We constantly try to find better ways to
keep our client’s calm during these wild swings and focused on their personal
goals and objectives. Hopefully the
enclosed paper from Franklin Templeton will help us do just that. (Please call
our office to request a copy.)
As always, if you have any questions, if anything has
changed in your situation or if you would like to discuss the stock
market’s current gyrations, please be sure to give us a call.
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Disclaimers and Disclosures
Enclosed is a recent article from Franklin Templeton that
discusses some of the Franklin Templeton Funds. This is not intended to be a
solicitation or recommendation to buy or sell since of course, we would need to
review your particular overall financial situation before recommending any
changes to your portfolio. We would
always caution that past performance is not indicative of future returns, and
before investing, please review the prospectus, which contains more complete
information about risks, charges and expenses.
Securities through KMS
Financial Services Inc.
520.884.7550
jpw@financial-architects.com brienne@financial-architects.com
3971 E. Paradise Falls,