“I just don’t trust the market, not after what happened to us in ’08-’09,” confessed a Monterey couple, who lost a bundle in the downturn.
Unfortunately for this couple, after asking their advisor several times to put them into more defensive investments as the markets plummeted, he finally agreed to do so at the bottom of the market. There they have remained, largely missing the 73% rise off the bottom in the S&P 500 Index.
“We were afraid to change, to go back in once we lost so much money,” she explained, as her unemployed husband shifted uncomfortably next to her.
Adding to the uncertainty they felt about the stock market, the sputtering local economy and dismal job prospects have also kept them on the sidelines. They are not alone, according to a mid-March national poll sponsored by Bloomberg, the global financial information company owned by the Mayor of New York. Almost half of the Americans polled believe the economy has worsened, rather than improved, and only three out of ten people believed the value of their investments in the markets has risen over the last year.
Despite hard evidence to the contrary, i.e. that our economy is recovering and that even the most defensive retirement portfolios have still done better than 2008 (despite the ineptness of most managers and brokers), Americans, it appears, are still mired in the depths of pessimism and yes, even despair. The Bloomberg study pins the blame on widespread unemployment and what people on Main Street see around them in every day life. Barely one in three respondents feel the country is on the right track.
Personally, I can commiserate with that attitude. I watched my own wife and daughter, two of the most optimistic people I know, become casualties of this last recession. After months of fruitless job searching, pessimism gradually crept into their attitudes as well as a certain cynicism. Both are highly qualified professionals and were out of work for about a year.
“I was totally frustrated,” admits Barbara, my wife, and now office manager at Berkshire Money Management, “I had all these qualifications and experiences and no one wanted to hire me.”
Jackie, my thirty-year-old daughter, just recently landed a job as an account executive at Olgivey Public Relations in Manhattan. My niece, Debbie, a recent college grad in Pennsylvania with top honors, relates that she had similar feelings. She too recently acquired the job of her dreams in Philadelphia.
Why do I enumerate these success stories to you, my dear reader? Because, for all those out there who are reading this with that same sense of pessimism, hang on and don’t give up.
Just yesterday, Berkshire Living reported that Moody’s Economy.Com, a leading economic forecasting firm, predicted that Massachusetts has pulled out of recession ahead of most other states. Aided by universities, hospitals and a housing rebound, Moody’s says that the state began a recovery in January and has joined 22 other states whose economics are now growing. They predict that we will be seeing job gains “pretty consistently from here on out.”
That miracle you are looking for is just around the corner.