No Pain, No Gain

Are we there yet?

After the volatility of the past two months, everyone wants to know if we’ve seen the worst that the market can dish out. The answer is, it all depends.

Now that the Federal Government has shown itself a willing partner in the banking system, it seems like the worst of the financial panic is behind us. Even if a further decline in the housing market burns thought the capital infusion that the banks have received, the Feds have shown that they’re not prepared to let the banks sink.

The pain that we’re seeing now—that of a “normal” recession–should set us up for better returns in the future. That’s because bear markets cause investors to adapt their strategies, companies to shore up their balance sheets, and consumers to adjust their buying patterns. And unless our elected reps do something really dumb, these adjustments will strengthen the economy in the long run.

A friend in the Marines tells me that “pain is weakness leaving the body.” In the case of the market today, the sharper the short-term pain, the greater the long term gain.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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By | 2014-09-04T14:11:43+00:00 October 27th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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