Warren Buffet says we’re seeing a financial Pearl Harbor. Is he right?
The Oracle of Omaha recently said that he’s never seen the level of economic fear people now have. Bank failures, money fund losses, broker bankruptcies, and insurance company bailouts have people crouching in a financial fetal position. What’s safe?
I know two things that are secure: work and friendship. Having solid skills that add value to customers will always be profitable. Building relationships with family and friends who encourage or correct you will always be rewarding. The best things in life are not things.
Financially, match your assets to your plans. Long term goals need long term assets. And even through all the bumps and bruises of the market, equities provide the best long-term returns. Unless you count education and relationships!
Finally, don’t panic. If you‘d bought stocks right after Pearl Harbor and held on for the next 20 years, you‘d have earned a return of over16% per year. Bank deposits only paid 3%. Downturns aren’t fun. But locking in a loss is even less so.
Douglas R. Tengdin, CFA
Chief Investment Officer
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