Filomeno Wealth Management, LLC
From The Firm - Client Release
Keeping Perspective During Challenging Times
WEST HARTFORD, CT - OCTOBER 1, 2008 – During the last few days and months we have witnessed extraordinary events resulting in profound changes to the global financial system. The collapse of Lehman Brothers and Washington Mutual, the bailout of AIG and Bear Stearns, and the acquisition of Merrill Lynch and Wachovia have created a great deal of uncertainty about the stability of worldwide financial institutions. Following yesterday’s rejection by the U.S. House of Representatives of the $700 billion economic rescue plan, stocks plunged in value worldwide. The fact that the Standard and Poor’s 500 stock index has fallen 28.48% during the past year is indicative of the magnitude of the market’s reaction to these events and the uncertainty they cause.
We know that you are concerned about your investments and have questions about what you should be doing. While we don’t know with certainty what lies ahead, we do have some thoughts to share with you.
1. As a client of ours, you have a detailed written investment plan as set forth in your Investment Summary. Among other things, your plan identifies your short-term needs for cash as well as your long-term investment strategy. Our disciplined investment approach for your plan is meant to apply during both upswings and downswings in the market. If your personal circumstances haven’t changed, we think the smartest decision you can currently make is to stick to your plan.
2. We want you to know that the cash you have invested in your Schwab money market funds is safe. On September 18, 2008, the U.S. Treasury established a temporary guaranty program for the U.S. money market mutual fund industry. All Schwab money market funds will participate in the program.
3. Market losses do create opportunities to sell investments to recognize tax losses to reduce your tax bill. They also create opportunities to buy certain mutual funds with built-in unrealized losses. We have and will continue to advise you of these opportunities.
4. You are not alone in being concerned-most of our clients are. However, without exception to date, our clients have taken a long-term perspective and not made investment decisions based on emotions. Our focus continues to rely on the time tested benefits of diversification and low costs.
5. We will be mailing performance reports through September 30, 2008 to you by mid to late October. While the results may not be as desired, they are accurate and serve as a basis of understanding and further discussion of opportunities.
Please click below to review more information:
- Morningstar graph and commentary on U.S. Market Recovery After Financial Crisis;
- Schwab commentary on the Treasury Guaranty Program for Money Market Funds;
- U.S. Treasury Announcement of Temporary Guaranty Program for Money Market Funds
Please call us if you would like additional information or want to discuss these matters further.
The offices of Filomeno Wealth Management are at 80 South Main Street, West Hartford. For more information see: www.filomenowealth.com or call
(860) 561-0020.
