Doing Fine in ’09?

Although 75% of Americans surveyed in the first quarter of 2008 thought the economic situation was “poor” at the time, 60% thought economic conditions in 2009 would be “good.”¹ Considering the market volatility over the past few months, will we see an improvement in 2009 economic conditions? What will this situation mean for you and your money?

Housing

The housing sector has taken a significant tumble recently. Although some
economists forecast another year of falling home prices, the decline is
projected to be less than half that of 2008.² Former Federal Reserve
Chairman Alan Greenspan speculated that home prices may start to stabilize or
touch bottom sometime in the first half of 2009, but could continue to fall
through 2009 and beyond.³

Interest Rates and Inflation

On October 29, 2008, the Federal Reserve lowered the federal funds rate from
1.5% to 1% and expressed a weaker economic outlook related to worries over the
financial and credit-market crisis. The Federal Open Market Committee said it
“expects inflation to moderate in coming quarters to levels consistent with
price stability….Nevertheless, downside risks to growth remain.”⁴

Before the rate cut, some economists believed that the Fed would have to
raise interest rates in the first six months of 2009.⁵

In a retirement poll conducted early last year, before their retirement
accounts and stock investments plummeted, many Americans already had a gloomy
outlook on the long-term future. In fact, only 29% of respondents were “very
confident” about saving enough to live comfortably in retirement; just 44%
thought they would be able to retire when they want to.⁶

When examining prospects for the near future, it is important to consider
your long-term financial goals. Economies and markets fluctuate constantly. It
can be tempting for investors to make decisions based on short-term fluctuations
without fully considering the long-term consequences.

Call today to discuss ways to potentially capitalize on financial
opportunities in 2009 while keeping sight of your long-term strategy.

1, 6) CNNMoney, March 21, 2008

2, 5) Wall Street Journal Economic Forecasting Survey, September 2008

3) The Wall Street Journal, August 13, 2008

4) Federal Reserve, 2008

This material was written and prepared by Emerald Publications.

© 2009 Emerald Publications