News You Can Use 12/21/00

The Road Ahead

     Have you ever driven down a road and could see off in the distance where the road continues, maybe where it goes through a pass or where it is cut into a hillside? You could almost reach out and touch where the road continues, but as you travel forward you find that it still took some time to get to that mountain pass. The road may have been perfectly smooth getting to the point you could see ahead, but more likely you went around curves and up and down some hills before you got there. And when you finally reached that higher level maybe you stopped to take in the vista. The view was nice. The curves and hills you had to traverse seem small in comparison to where you ended up. That's what the market is like. We know we've gone from extremely high levels earlier in the year to what can only be described as extremely low levels as the year ends. What if you'd come to that first small hill and stopped? Or what if you came to that first curve and didn't want to put out the effort to turn the steering wheel? These are rhetorical questions. The answer is obvious. You would have stopped at that point in your trip and never reached the mountain pass or plateau that laid ahead. You would have stayed in the low lands and not enjoyed the dramatic vistas that lay just ahead.

    You are intelligent. You see the parallel. The markets are at extreme levels to the downside but it is not time to get out of the game. Over the past 15 years it's been virtually impossible to buy at a market TOP and not have the market higher at some point over the next two years. And that was at market tops! If the market has moved higher from market tops where do you think it will move now that we're sitting at or near a market bottom? Baby-boomers WILL continue to need to fund their retirement accounts. The Bush administration WILL give Social Security funds some limited access to the stock market. Technology, telecommunications, and the Internet WILL expand its influence on our lives with new products businesses and consumers WILL buy to replace current technology. Biotechnology WILL find new cures and drugs to make our lives healthier. Setting aside emotion, the odds are excellent that the market will spend better than 50-75% of the next two years higher than current levels. The odds are that two years from now you'll be able to look back and see that this was one of those rare opportunities to BUY stocks at prices that were incredibly cheap compared to levels two years from now. A well-diversified portfolio of stocks in growing industries, with good financials, products, and management should have significant gains from current levels.

QUOTE"The secret of success is……there is no secret of success." - Elbert Hubbard

Back to the Index