Newspaper Page Text
September 24, 2008
^Reporter
PAGE 13A
Emotions: Poor investment guides
H uman emo
tions. There
are many,
each playing a
key role in our
daily lives. One place that
I don’t think they belong is
aiding us in our
investment deci
sions. During my
years as a finan
cial advisor, I have
come to the conclu
sion that two emo
tions move the
markets- fear and
greed. Right now
fear is abundant.
This article may
be a little different
from many of the
other articles that
I have submitted,
but my goal will remain
the same and that is to
help aid you in making
prudent investment deci
sions.
First I want to discuss
the safety of your money.
For this, we will start with
banks and some of the
most common investments-
your CD’s. Certificates of
deposit are a fairly simple
investment. You agree to
loan a bank a certain
amount of money for a set
period of time at a certain
rate of interest... The typi
cal CD investor is not as
interested in the growth of
there assets as they are
the security of them.
Most banks have FDIC
insurance. The FDIC -
short for the Federal
Deposit Insurance
Corporation - is an inde
pendent agency of the U.S.
government. The FDIC
protects you against the
loss of your deposits if an
FDIC insured bank fails.
FDIC is backed by the full
faith and credit of the
United States Government.
All FDIC insured banks
must meet high standards
for financial strength and
stability. The FDIC, with
other federal and state
agencies, regularly reviews
the operations of insured
banks to ensure the stan
dards are being met. In the
“RARE” event a bank were
to fail, FDIC insurance will
cover your deposits, dollar
for dollar, including princi
pal and any accrued inter
est, up to the insurance
limit. Normally, that limit
By Jason
Jungberg
is $100,000 per depositor
per insured bank and for
individual retirement
accounts $250,000 per
depositor per insured
bank. The FDIC does not
cover market losses on bro
kered CD’s.
Second, I want
to address your
investment assets
held at brokerage
firms. In the
U.S., more than
$25 trillion in
investment assets
are held by indi
vidual investors
(you) at broker
age firms. In the
U.S., brokerage
firms function
under strict regu
latory oversight provided
primarily by two bodies,
the Securities and
Exchange Commission
(SEC) and the self-regula
tory Financial Industry
Regulatory Authority
(FINRA). Now that we
have that out of the way,
let’s move to how they pro
tect you. The cornerstone
of protection of client’s
assets in brokerage firms
is the segregation of assets.
SEC rule 15c3-3, the
Customer Protection Rule,
requires that all fully
paid( 1) client securities are
to be held separately from
brokerage firm’s own
assets, and are not avail
able for the firms use.
This rule ensures that if a
brokerage firm were to
experience losses,
investor’s assets would not
be affected. In plain terms,
if you own 100 shares of
XYZ stock and your bro
kerage firm goes under
they can not touch your
shares of XYZ. In the rare
event that a brokerage
firm does fail, investors
benefit from additional lay
ers of protection. The
Securities Investor
Protection Corporation
(SIPC) intervenes as soon
as possible in the event of
failure of a member bro
kerage firm and appoints a
trustee to take charge of
the failed firm. The SIPC
then ensures the orderly
transfer of client’s assets to
another firm. They, also in
the case of fraud, SIPC
help recover investor’s
assets and provide protec
tion against loss of up to
$500,000 including
$100,000 in cash for each
individual investor. Again,
market losses are not cov
ered. For more information
go to: www.sipc.org.
So far, we have focused
on a few of the many provi
sions put in place to pro
tect your assets. Now let’s
focus on the economy and
talk a little about the
greatest country in the
world- the United States of
America. Our country’s
economy runs in cycles;
there are times of expan
sion, and there are times of
contraction. Sometimes
these contractions lead to
recessions. There have
been 10 recessions official
ly declared since World
War II. The average length
has been 10.4 months with
a median decline in the
S&P of 20.6 percent.
Though the past cannot
guarantee what will occur
in the future, after each
and every one of these
recessions came an
advance in the S&P.
Investors have historically
begun to anticipate a
recession’s end well in
advance of the economic
data bottoming and the
subsequent rebound. Even
as the economic data is
still declining, the stock
market’s historical per
formance has been very
dynamic once the bottom is
reached. Investors are
thus penalized for being
out of the markets because
of the speed of the
advance. The average
advance six months past
the bottom has been 26.3
percent; 12 months later,
the S&P rallies averaged
33 percent; 15 months
later, the rallies averaged
35 percent. Currently the
S&P is down 24 percent
and in my opinion, we have
been in a recession since
last December which is
around 10 months. So why
aren’t people pouring
money into the markets in
anticipation of the rally
that has happened after
every recession? Emotions.
Fear is very difficult to
overcome. You have been
inundated for the last 10
months with bad news all
over the TV and radio; you
may have investments that
Lookout for
surveyors near
disputed county line
Monroe
County
The company surveying the
Monroe-Bibb county line is remind
ing residents in the disputed area
that it has authority to enter those
properties to do its surveying work.
Scarborough Land
Surveys, Inc. is currently
surveying the disputed
boundary line between Bibb
and Monroe counties.
Scarborough was appoint
ed by Gov. Sonny Perdue to
set the line. Scarborough’s
ad in last week’s newspaper
served notice of intended
entry to residents of Bibb,
Monroe, Crawford and
Jones counties who reside
or own property along or
near the disputed line. The
entry would be for the pur
pose of conducting land sur
veying.
Scarborough’s notice also
applied to public utilities,
transporation agencies and
commercial businesses
along the disputed line.
Scarborough employees
will be identifiable by ade
quately marked vehicles
and clothing, said the
notice.
Scarborough said it would
make every attempt to alert
those property owners
whose property requires
lengthy overland travel
from public highways to the
area of the survey, prior to
entry.
All courtesy and
support for access to the survey
area will benefit expediency, said
Scarborough. The survey should be
completed by May 1, 2009.
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are already down to
uncomfortable levels. It’s
not strange that you are
concerned and uncertain,
its human emotion, it’s
natural. You have to try
and take the emotions out
of your investment deci
sions. The best time to buy
stocks is when it feels most
uncomfortable, and that is
usually when they are
down. I believe the best
time to sell and reduce
your stock position is typi
cally when things are good
and stocks are up. Now I
am not recommending you
take your money out of
your emergency savings
account and pour it into
the markets. Every indi
vidual is different. Every
individual has different
goals and risk tolerance.
You should be broadly
diversified amongst many
different asset classes to
help reach your goals.
There are many good
resources that you can use
to help you in your plan
ning process. Stop in and
speak to your local banker.
I personally know many
individuals that work in
the local banks in Forsyth
and I am sure they would
be happy to answer any
questions you might have.
Talk to your financial advi
sor, if you don’t have one,
ask a friend if they do and
give him a call. I, being
one know that we are here
to help answer any and all
of your questions.
One of our greatest
attributes as Americans is
our resilience during diffi
cult times. We are at our
best when the going gets
tough. Over the last 70
years we have been
through a lot Pearl Harbor,
the Cold War, Korean War,
Kennedy’s assassination,
the oil embargo, Cuban
missile crisis, the dot com
bubble, and 9/11 just to
name a few. During that
same time period, we have
seen the Dow go from 200
to 10,000. Markets will
fluctuate and interest rates
will change. Try your best
to keep your emotions out
of your investment deci
sions. Develop a plan that
includes a time frame and
clear goals for your money
and build your portfolio
around them.
This article is provided by
Jason Jungberg, Financial
Advisor with Wachovia
Securities, LLC Macon,
Georgia 478-471-1111. The
information contained
herein has been obtained
from internal and external
sources believed to be reli
able but is not necessarily
complete, and its accuracy
is not guaranteed by
Wachovia Securities.
Opinions expressed are
those of Jason D. Jungberg,
and may not be those of
Wachovia Securities.
Additional information is
available on request. This
is for informational pur
poses and is not an offer to
buy or sell any security.
Wachovia Securities, LLC,
member SIPC is a regis
tered broker-dealer and
nonbank affiliate of
Wachovia Corporation.
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I
Please Elect
Karen K. Martin
for District Attorney
For the legal system to be effective there must be cooperation
between all the agencies involved. Too often there is little com
munication between Police Departments, Sheriff’s Departments
and the District Attorney’s Office. At times this failure to share
vital information is simply due to human error, but unfortunately
there are causes when for whatever reason one agency is jealous
of another and does not share critical information. Only the
criminals profit from these “Turf Wars”.
If I am elected District Attorney one of my first priorities will
be to establish a comfortable working relationship with all law
enforcement agencies within the Towaliga Circuit.
In as much as possible I believe the District Attorney’s Office
should be involved in the investigation of all major cases from
beginning to end.
Early voting September 22nd through October 31st
General Election November 4th
I
I
I
Fall Fellowship Ride
| f Ride to support Christ United Methodist Church Building Fund and
Forsyth Community Food Bank.
pA Enjoy continental breakfast & BBQ chicken plate for lunch.
pA Win door prizes.
Saturday, October 4, 2008
$25 per rider $15 per passenger
One FREE door prize ticket with each can of food donated.
Registration 9-9:45 a.m.
Ride 10 a.m. - 12 p.m.
Lunch 12:30-1:30 p.m.
Christ United Methodist Church
Frontage Road, Forsyth, GA 31029
Take Exit 187 off 1-75 and go north on GA 83. Take first left on Frontage Rd.
and the church is 3/4 mile on the left.
For information & pre-registration call 478-994-1041 or 478-390-2574