Fred Mcallen Running from the Bear Market

Regarding Advisors, Prognosticators, and Talking Heads -
Rule # 1: Don't follow their advice.
Rule # 2: Don't forget Rule # 1.

No, I'm not a gloom and doomer, I don't think the world will end tomorrow, and I am not related to Chicken Little. But I don't think the Yellow Brick Road leading to your retirement is paved with $1700 per ounce Gold or goes through Oz either.

Just like everyone else, you want to know what's going to happen in the near term and the long term so you can plan for it. Problem is, no one knows. And if they act like they do, then you should find the nearest exit. There's nothing more dangerous than someone who thinks they know and is not smart enough to realize they might be wrong.

Warren Buffett said in 2000:

“The next 17 years will certainly be different than the past 17”.

He was right! Of course more recently, he also wrote a letter to 'Uncle Sam' complimenting the administration for its handling of the financial crisis with the Quantitative Easing, more particularly the decision to buy back more than half of a Trillion dollars of bonds. Since Mr. Buffett has increased his stake in Goldman Sachs, a company that will be one of the first beneficiaries of this second round of government stimulus, then his letter to ‘Uncle Sam’ should likely be viewed more as a ‘thank you’ for the portion of the bucks he will ultimately receive through his investment in Goldman Sachs.

Is it any surprise that upon the announcement in early November from the Federal Reserve that QE2 was a reality that the stock market advanced rapidly gaining over 200 points in the Dow in one day? It’s even less a surprise that it only took six days for the market to sell off and close lower than where the advance started.

Running from the Bear, this is the type of market you should expect. Get to know it. Learn to like it. It will be around for a while. Find the humor in listening to the Talking Heads desperately trying to explain the current market situation while attempting to make you believe they actually have a clue as to what they’re talking about.

No, I do not claim to know what the market will do in the future. One of the classic rules of investing is “Never fight the Fed”. That does not guarantee an increase for your investments any time in the future. That does not mean you can sit back with complete confidence that the Federal Reserve will continue to drop money from helicopters causing the bottom line of you investment account to increase in value.

Complacency, or having a defeatist attitude is certainly a great recipe for financial suicide. Just sit back and watch it happen. But if you want to prosper in this market, and any market for that matter, you need to educate yourself. Financial Advisors, Planners, Gurus, and Talking Heads on Financial News Networks won’t tell you the truth.

They do not have your best interest in mind. Advisors are commissioned salespeople, nothing more, and nothing less. They will sell you whatever pays the best commission regardless what the market is doing or about to do.

No one told you how to make your money, and Financial Advisors and Investment Firms don't really care whether your money grows in the future or just sits there paying them a commission and earning fees for the Fund.

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