When Fear turns into Panic!

At Buttonwood Financial Group we are committed to assisting you with all aspects of your financial life. This includes providing information you can use to make educated financial decisions and not allow fear to turn into panic...

In an attempt to obtain a variety of opinions we have gathered information from several firms and have consolidated those views on this page. We have made an attempt to gather simple, and concise answers - not long dissertations - to hopefully answer many of the questions investors have.  Please click on each "LINK" after the "Answer" to download the associated research.

While this is only a brief summary of all the questions swirling around out there hopefully it is a place to start.  If you have additional questions and answers you would like to see posted please call or email Jon or Vince at 816-285-9000!

Question: These are scary times!  The media is driving us crazy!  One commentator says one thing and the next guy says the exact opposite! What is the truth? Who is right?  What key points should we focus on?

Answer: James Swanson, Chief Investment Strategist for MFS has created a list of "6 Facts and 10 Reminders for Investors.

"LINK - 6 Facts"

Question: The guy on TV says this is the beginning of another Great Depression. It sure feels like it... why should I believe otherwise?

Answer: James Swanson has also put together a 1 page summary comparing the situation today with the 1929 Great Depression Era.

"LINK - Why This is Not 1929"

Question: If we think the market is going lower why not just sell stocks now and buy them back when things get better?

Answer:  One of the biggest risks an investor takes by selling stocks when the market is down is that they will miss the bottom and have to buy back in at a higher level.  Putnam Investments has developed a 2 page summary illustrating the impact of missing the best days in the market.

"LINK - Best and Worst Days"

Because this is a very important concept, we have a second summary provided by JessisonDryden as well.

"LINK - The Cost of Missing a Rebound"

Question: What has happened to the markets in the past when we have had other times of crisis?

Answer: Another interesting piece from Putnam makes a simple list of many of the past times of crisis, what the market reaction was at the time, and where the markets were at various times in the future. 

"LINK - Crisis and Market Reactions"

Question: Most economists believe we are in a recession and that the recession will run into 2009.  The question then becomes, if we believe the economy is going to be weak for quite a while why would we want to own stocks?

Answer: Stock markets tend to bottom when we are in the MIDDLE of the recession.  We agree with the statement that the US is in a recession and it may take some time to get through all this mess.  To address this question we again turn to JennisonDryden and a 2 page summary detailing market moves during each of our historical recessions.

"LINK - Historical Look at Recessions"

Summary: To tie many of these individual questions and answers together we located a 13 'slide' summary produced by LPL Financial, one of the companies we use to hold client assets. 

"LINK - History Shows A Case for Optimism"

If you are not currently working with us, or you are finding you receive more communications and answer from us than your current financial advisor we would appreciate an opportunity to talk with you.  At Buttonwood we develop client specific strategies so your investments, tax, estate planning, insurance, and cash flows are all working harmoniously together.  Please contact either Jon or Vince at 816-285-9000 / 800-448-9093.