Market Review for Week Ending 5-15-09

Last week the market declined 4.6%. For the past few weeks I have mentioned that I thought the odds favored the market falling in price. Because the technology sector normally leads a new trend I have felt this is the sector to watch. Technology has recently declined 6% and is currently holding its own. If the market is in the process of changing its trend we should not see the markets fall much further. It would be concerning (and empowering to short investors) if the SPY fell much below $88. If this does not occur then we should see the markets advance nicely from here and move on to healthy new levels.

I spend a lot of time talking about the cut and dried statistics of our economy but today I want to shift gears and talk about YOU. How are you as an individual holding up emotionally in these troubling times?

There are many crises in this country right now but the most important one may very well be the crisis in confidence that many are feeling today. I am not looking to minimize what has happened, or may happen going forward, but rather focus your attention on what you can do to improve your mental state of mind.

No matter how long any of us may live it is surely too short a ride. Therefore it is imperative that all of us put the current times in proper perspective and make sure we do not shorten our time here on Earth with sustained worry.

The emotion of fear is very powerful and is usually something that occurs in a fleeting moment. Your body has a fight or flight moment and then it passes. But troubling economic times do not pass quickly and therefore contain the power to destroy us slowly from the inside out. If we are not careful, the tough economic times will pass, but the self-imposed stress that we endured will have done permanent damage.

If there is one piece of wisdom that has been passed on through the ages it is that peace of mind is the highest good. Worrying about money all the time robs us of peace of mind and for all intense purposes does not do any good. The best that any of us can do in challenging times is focus on what we CAN do.

Can you spend less money? Can you save more money? Can you be a better employee or business owner? Can you start a small business? Should you sell some assets, like a big home or boat, that is draining you financially? Can you eat out less but entertain more at home? Give some thought to your own life and see if there are some things you could be doing to improve your own peace of mind.

I do not think that anybody reading this newsletter is going to die from poverty. However I do believe that there are people who are reading this newsletter that are doing permanent damage to their health with constant worry. If this recession continues for many years into the future what condition will you be in when it finally ends. When it comes to your money you pay me to worry about it, and trust me when I tell you, I do more than enough for the both of us. With that in mind, I will continue to WORRY about the stock market so YOU DON’T HAVE TO.