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You will find here answers to common questions we have either recently been asked or anticipate may generate client interest.
What are RWM’s thoughts on current market gyrations?
The current global stock market correction has caused mixed reactions. Some investors are running scared, while others are buying beaten down stocks at greatly reduced prices. Investors love to compare their holdings to the highest known value within recent memory. The broad market indexes hit their highs on July 19th. Since that time, the Dow Jones Industrial Average has corrected approximately 9% and the S&P 500 has corrected approximately 10%. This is about what a normal market correction would exact. The reality is that we have not had a material correction in the markets since early 2003. We were probably due for an adjustment in equities although no one really knew when it would start. It is also worth noting that in every year since 1997, there has been at least one negative quarter, five of which were at or above the level of current correction. The point is that this is not new or unusual. The market goes through cycles, and the patient are typically rewarded because the best rebound typically occurs shortly after the market bottoms, which no one can definitively pinpoint until after the fact. Bob Doll, the Chief Investment Officer at the BlackRock Funds, points out that while we are experiencing a credit market correction, the overall economy remains in decent shape. We are not breaking any economic records, but companies remain profitable and are delivering sales gains across the board. The real question is how will the credit meltdown spillover into economic reality. This uncertainty is primarily what is driving the current correction. In a signal that the Fed is willing and able to come to the rescue of the market’s questions of liquidity, early in the morning on August 17th, the Fed cut its discount rate, which is the rate it charges banks for short-term borrowing, by ½ percentage point. The pre-market stock futures cheered the news with a mini-rally. The message we have is simple: be patient, this too shall pass.
~ Posted August 17, 2007
Why did I receive two (2) separate monthly statements for the Month of May from TD Ameritrade?
Due to the merger of TD Waterhouse and Ameritrade, you have been assigned a new account number. As part of this process, you will be receiving the same account statement that you are accustomed to seeing (with an account number beginning with a “5”). This statement will show all assets being transferred out and therefore a zero (0) balance. DO NOT PANIC. The second account statement is the new format with your new account number, which begins with a “9”. This new account statement will show all of your assets being transferred in.
~ Posted June 5, 2007
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