July 12, 2005

To Our Clients and Friends,

BON JOUR

There are always reasons to invest tomorrow rather than today. There never has been a shortage of reasons to pick from if you are looking for reason's to stay out or get out of the stock market. Nick Murray refers to this phenomenon as the "Apocalypse de jour." Today it is sky rocketing oil prices, high interest rates, a government awash in red ink, to name just a few of the current apocalypses. Yesterday, it was corporate malfeasance, unemployment, and inflation. Tomorrow, it will be ____________ (insert your own fear). The bottom line, as always, is that we don't know what will happen to the economy, corporate profits, or stock prices in the short run. What we do know is that all three will grow over the long term, and that investors would be better off ignoring the media and it's advice.

The media - print, television, and the internet, are the main sources of information for the average investor. All of these sources have become intertwined with our daily lives. The problem is that media companies are businesses. Their big source of profit is advertising, and the larger the audience, the more money they can charge advertisers. So, how do they reach and maintain their audience? The best way for investment oriented media is to appeal to the two main drivers of investor behavior (psychology), greed and fear. These two buttons are pushed often and hard by the financial media. Stories often relate to the next big stock poised for huge gains (greed) or warnings of impending disasters (fear).

My simple advice is to ignore the daily barrage of financial news. The best way to invest is to create in a moment of quiet a rational, personalized investment plan based on your financial reality and tolerance for risk and stick to it. The "Big Mistake" a long-term investor can make is to abandon his/her investment plan because of fear. Every investor makes mistakes but good investors minimize them by being disciplined. An investment strategy based on analysis and not on reactions to market swings helps you maintain confidence in good times and bad times and is critical to long-term investment success.

FOOD FOR THOUGHT

What is the life expectancy of the survivor of a non-smoking couple who retires today at the age of 62?

As usual, please feel free to call us. We are here to answer your questions, respond to your concerns, and help you make smart decisions about your money.

   

Very truly yours,

ZRC Financial Services, LLC
A Registered Investment Advisor

By:
         Richard P. Clarke

P.S. The answer to the above question is 92, which means their retirement money has to last at least 30 years.