Pixel Tracker

Saturday, March 23 , 2019, 2:54 pm | Mostly Cloudy 62º

 
 
 
 

Alan Griffin: Panic Is Not an Option

Crowell, Weedon & Co. shares valuable market insights from one of its independent portfolio managers, Kelly Capital Management

The recent stock market nosedive has sent many people into a panic as they see their hard-earned savings suddenly and perhaps significantly reduced.

Alan Griffin
Alan Griffin

The following was written by one of Crowell, Weedon & Co.’s portfolio managers, Jim Kelly, president of Kelly Capital Management. His comments were the best I’ve read on the recent market volatility, while offering a welcome perspective.

During delicate economic times, keeping lines of communication open are critical, so Crowell Weedon is lucky to be able to collaborate with experts such as these and share insights.

Here’s what Kelly shared with us:

Unlike 2008-2009, when “things were different,” we believe the issues and problems are clear in 2011-2012. Specifically:

» Control spending. Federal and state governments need to spend only what they can fund — just like a household budget.

» Obtain the required revenues to keep necessary programs functioning (yes, this will mean some tax increases).

» Print the required amount of currency to pay the known bills — in other words, inflate our way to a nondeficit environment.

» Debase the currency so we have an advantage in international exporting. A weak dollar helps us sell to the world what we still make here.

» Be prepared for inflation’s return. Prices will increase, as interest rates must also.

» Create a positive business environment to encourage worker confidence. This will translate into consumer spending.

» Foster demand growth, which will lead to job creation. No demand growth = no job creation — business owners know this.

History shows that running for cash has the following impacts:

» Lower total return than staying invested according to plan.

» Taxes on realized gains (where applicable) and transaction costs reduce principal available for reinvestment.

» Longer break-even time than remaining fully invested (possibly beyond one’s expected lifetime).

Our economy is a bit anemic, but it’s growing. We do not forecast a recession. The stock market has made some volatile moves this year, but the year-to-date percentage changes are only about a nickel on the dollar for the Dow Industrials and less than a dime on a dollar for the S&P 500. These are easy declines to make up, and we anticipate that we will see the markets at higher levels by year-end.

Unless you think the United States is going out of existence and the entire economy is going to literally stop, then now is the time to put money to work. On balance, if you wanted to buy something and liked it at “full price,” then why not buy it when it’s on sale for a 5 percent to 10 percent discount?

If you have free capital, send it into your account now. If you haven’t made your IRA contribution for 2011, do so now. The market is on sale. The way to make money now is to act while the opportunity exists!

— Alan Griffin is branch manager and partner of Crowell, Weedon & Co., 111 W. Micheltorena St., Suite 200, in Santa Barbara. Click here for more information or call 805.618.3160.

Support Noozhawk Today!

Our professional journalists work tirelessly to report on local news so you can be more informed and engaged in your community. This quality, local reporting is free for you to read and share, but it's not free to produce.

You count on us to deliver timely, relevant local news, 24/7. Can we count on you to invest in our newsroom and help secure its future?

We provide special member benefits to show how much we appreciate your support.

Email
I would like give...
Great! You're joining as a Red-Tailed Hawk!
  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >

Meet Your Realtor Sponsored by Village Properties

Photo of Elizabeth Wagner
Elizabeth Wagner
"I typically do whatever it takes to properly expose the property and get it out to the widest possible audience."

Full Profile >