From the February 2008 issue of Boomer Market Advisor • Subscribe!

Talking ourselves to retirement ruin

I was reading the Wall Street Journal weekend edition (yes, I'm that much of a geek) when I came across the following, "The U.S. has suffered recessions only twice in the past quarter century and both were short and mild. There are good reasons to fear that the looming recession, if it arrives, could be worse."

I shrugged it off to more media hype and enjoyed the rest of my Sunday. Monday wasn't nearly as pleasant. "European, Asian stocks plummet," said one headline; "Worst losses since the Sept. 11 attacks," screamed another.

This prophecy is self-fulfilling, and we're certainly in the midst of fearing fear itself. As Dr. David Kelly, chief market strategist with JP Morgan Funds tells us in this month's issue ("10 questions for David Kelly"), "It's almost like a psychosomatic illness where the symptoms are real but the illness itself is imaginary."

Remember, housing accounts for about 4 percent of GDP, and far less than one percent of homes are in any stage of foreclosure. The credit crunch is a serious problem, but despite daily headlines, the majority of the affected financial institutions are taking necessary steps to shore up their balance sheets -- steps that will position them well for the long-term.

I realize I'm in large part preaching to the choir, but knowing what we now know about behavioral economics, emotional investing and the dangers of retiring in a down markets, including a quick review in your client meeting is well worth the time.

Also, be sure and check out our new monthly feature, Boomer Market Advisor CE Test. Score a 70 percent or higher and you'll gain credit towards your continuing education requirement. It can be found on page 80. Now that is really well worth the time.

John Sullivan, Editor

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