Golden Opportunities

There’s a saying – “Those who fail to understand history are doomed to repeat it.” Now, I don’t think any of us want to repeat this past financial year! So, to help us understand what happened over the last 12 months, we have our financial historian Jonathan Herbruck from Concord Advisors.

Question: The market deep sixed in '08. What happened?

Answer: We actually have to look farther back than one year to understand how we ended up with the market conditions of today. I like to use analogies to help explain things to my clients.
To begin, have you ever heard of the Lake Erie Fish Advisory?

Question: No. Your question sounds a little "fishy" for a financial segment.

Answer: It says that you should only eat so much fish because of the mercury content. We have industry and power plants creating mercury. This collects in the lake and is absorbed by the algae. When the Zebra Mussel was introduced to Lake Erie, it loved the algae and began to aggressively eat the algae tainted with mercury. Then it went on up through the food chain – the mussels were ingested containing mercury – and since we are on top of the food chain, we are threatened by its effects – cancer.

Question: So, how does this fish tale illustrate today's financial market conditions?

Answer: The power plant is the government back in 1977 when a bill was passed to offer loans to low income families. The mercury represents the low interest rate loans contaminating Freddie Mac and Fannie Mae. The algae are the low income families and aggressive borrowers. The local banks and merchants are the Zebra Mussels offering the low interest loans at an aggressive rate. Those loans are then absorbed up through the food chain and bought out by regional banks, then national banks, and finally investment banks like Lehman’s. Lehman’s then pools together those mortgages which cannot be properly valued and are considered bad debt. This has become the cancer of the cycle.

Question: Okay, so we fell for these investments hook, line and sinker. How do we start with "fresh water" financial plans?

Answer: In my opinion, it will take lots of money from the government – and lots of time. Unfortunately, that does not help the baby boomer generation ready to retire now.
I would like to offer to your viewers a free initial consultation to help plan for retirement and discuss their options. Also, if your viewers want to keep up with the market conditions in an easy explainable format, they can go to our website and download our icon to their computer.

You don’t have to fish around for a good financial advisor! Just contact Jonathan at Concord Advisors. Their information is next.