Wednesday, October 01, 2008

Letters From The Edge

My friend Ryan forwarded me an email from his financial planner last week. I wonder if you've received messages like this one I too? I'll paraphrase:

"Dear Ryan, as you know it's really hit the fan down there in the U.S.. The economy has taken such a beating we don't ever know when it'll be sorted out. Many of the stocks and funds that we've invested in have crashed. It's worse than pretty bad, it's downright awful. Every night I look at the bottle of Scotch on my bedside table and wonder if tonight it will hold the answers I need to know...

The only thing I can tell you for sure is not to panic. (
He's panicking now and you can feel it in the letter, almost see the swollen streams of ink where the tears fell)

Keep your money invested in these funds even if they go to zero, because I have to eat too. And remember, everything will be ok one day. The markets can't stay down forever, right? Right?"

You could really hear the fear and uncertainty come through in his letter. I agree that the markets won't stay in the gutter forever. But, hey I'm not going to live forever either and I don't want to spend the next couple of years floating around in the toilet of discontent waiting for another big flush.

The truth is that time heals most wounds. However, when it comes to investing you sometimes have timelines to meet, like retirement for one. You don't want to be tossing good money after bad as things balance out. I also got a letter like Ryan's from my planner. I've actually been watching one of my stocks go from $26.00 a share down to today's new low of $1.44. So, I'm not making light of real losses.

Obviously I prefer hard assets and have 90% of my wealth invested into them. The simple reason is that time and time again a well purchased revenue property repeatedly proves it can survive and thrive a dip in the market and bloom during the peaks.

You know some people will worry and others will take action. That's just the way we are. Those that can brave the miasma of uncertainty today are the same few that will savour the smell of sweet, sweet roses tomorrow.

Edmonton has got a bargain sale going on. Investing in tangible cash-flowing assets will not only protect your wealth but also increase it exponentially over time.

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