Friday, September 28, 2012

My Quarter End: 3Q 2012

Now that was an unbelievable quarter. Typical summers include outdoor barbecues and patios, lots of trip to the beach, good suntans and little to no market movement. Historically speaking, summer trading sessions are usually thin with a trend of generating marginally negative returns. But not this past one! In just our taxable brokerage investment account alone we saw growth of nearly 10%  in this 3rd quarter alone.

Now while I advocate buy and hold investing over a long period of time, I sincerely hope you guys and gals out there got to be a part of this unexpected lift this past quarter. What is even better is that there is still the 4th quarter of this year to look forward to. The US President will be elected, Thanksgiving will occur followed by black Friday and the Santa Claus rally all give me cause to sound my bull horn to close out 2012. I firmly believe, given how returns have been so far this year, that 2012 will go down as one of the best years in stock market history. I mean as of the end of this quarter the Dow Jones is up over 11% from January 1!

But beware because glancing into my crystal ball I do see an ugly bear on the horizon for the 1st quarter of 2013. I can summarize with this one statement. The US Government is stupid. Yes we are heading towards a fiscal cliff and I do not think anyone in the Senate nor Congress is smart enough to keep it from happening. Partisan lines are drawn too thick and the grandiose ineptness of government is going to show its true colors through this debacle.

Which leads me back to my general investing philosophy: buy and hold for at least five years in old and historically proven mutual funds. Yes in the short term once we are all pushed off the fiscal cliff the market will drop, but in the long run market returns will come back and be right in line with historical averages.

So I’ll end the 3rd quarter of 2012 with this PSA: Do not count on the government. Romney can’t help you. Obama can’t help you. Only you can change your fiscal picture by getting out of debt and saving for your future. Because frankly I’m with Dave Ramsey on this one (surprise): If we can all band together to create a total money makeover movement, where we all get out of debt, build wealth and give on a level unseen before in our world, TOGETHER we can all put the government out of business! And that’s a crusade I am happy to lead on the front lines. Happy 4th quarter out there to everyone!

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