Dear Clients and Friends,
It has been an interesting quarter. I have seen a rise in the uncertainty level from investors over the last three months. The major US indexes are down about 12% since the beginning of April and European indexes are down slightly more - around 13%. As a result of all this uncertainty, when people find out I am an advisor, I frequently get questions about various markets. From, "What do you think about Greece?" to "Are government bonds still safe?" I imagine in good times people will be telling me about how great their investments have performed, but for right now, fear and uncertainty certainly seem to be the themes.
All that uncertainty can be uncomfortable. And there are big structural reasons for uncertainty: government stimulus ending, massive deficits in developed countries, unfunded liabilities for pensions and entitlements, high unemployment. The list goes on. We equate uncertainty with risk. That's natural, but it is not always correct. In fact, periods of uncertainty can often drive prices of assets so low, that future periods of higher returns are extremely likely.
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