Another Market Drop
by Jay L. Gershman
After another 600 point drop on Thursday, I felt compelled to reach out for no other reason than for you to know that I'm still here. Admittedly, I am just like you, a part of a history making event and would be more comfortable if I knew how this ended instead of having to experience along with you. As an advisor it leaves me with a feeling of complete lack of control and frustration. If I were a surgeon, I would tell you your loved one is in critical condition following the surgery and nothing more can be done but wait. When asked if more surgery would possibly help, I have to be honest and tell you that I believe our odds would not improve. In time, I believe the odds are in our favor and that watching the monitors will not be helpful, but instead it might be wise to have faith or say a prayer or two.
Probably not what you want to hear, but it is the truth. Let's update you on what's happened in the last week or so.
-- The US Government signed a Rescue Package that will provide liquidity by buying mortgage instruments that have become illiquid.
--The Central banks around the world have acted in concert for the first time by lowering interest rates which will provide additional liquidity.
-- The US Government announced on Tuesday that it plans to provide liquidity for the corporate paper market to prevent businesses from failing through lack of liquidity.
--While most investors are horrified by plummeting stock prices, bond prices have fallen to record lows as yields on bonds have risen to equally irrational levels.
Corporations need bonds to function and liquidity is needed for rates to fall.
One final thought, if it is possible to learn from history, I found an archived article on my website that is eerily similar to our feelings today. Please take a moment to read the article I wrote in September 2001.
As always, I am available 24/7 on my cell phone at 860 559-9042.
Securities offered through Securities Service Network, Inc. Member FINRA/SIPC. Jay L. Gershman, Registered Representative. Fee based services offered through SSN Advisory Inc, Registered Investment Advisor. Office of supervisory jurisdiction 10207 Technology Drive, Suite One. Knoxville, TN 37932 865-777-4677