Investor Strategies in a Contracting Economy

October 16, 2008

For the past month, the main topic of discussion among Microsoft clients of Onsite Computer Services in the New Orleans metro area is the economy and its effect on retirement savings.  Our larger, well-heeled clients, who seemed insulated from economic cycles, are now fully focused on the monetary crisis.  Opinions of the present situation vary greatly, even among members of the same family.

At one extreme are the clients who are losing sleep because of sharp reductions in the value of their retirement savings.  Those who thought their investments in the stock market would provide an adequate retirement are now facing 15% to 50% reductions in the value of their portfolios.  The present stock market volatility drives some individuals to their psychiatrist as incessant thoughts of financial loss lead to anxiety and depression.  These individuals are faced with thoughts of capitulation in an effort to provide relief from the potential of further losses.

At the other extreme are the clients who are excited at the tremendous buying opportunities presented by the current stock market contraction.  Onsite Computer Services visited one enthusiastic client who follows the investment strategy of dollar cost averaging.  This client is excited at the wonderful prospect of higher than normal returns during the expansionary period that will certainly follow the present contraction.  This client is following the mantra of dollar-cost-averaging and is faithfully contributing a fixed amount each month to his portfolio, regardless of market conditions.

The BIG issue is when the economy will complete its present contraction and begin its successive expansion.  It will be interesting to see what effect the efforts of the Federal Reserve and the Treasury will have on the tremendous financial mess we all presently face.  One thing is apparent – the end of our present economic woes will require time.  In the words of our enthusiastic client, “… now is the time to keep your powder dry.”  What do you think?

If you’re searching for New Orleans computer service or repair of your Microsoft based system or network, then call the Microsoft specialists at 504-469-6991. Onsite Computer Services, Inc. in New Orleans

You may also be interested in Onsite Computer’s Blog.

This New Orleans On-Site Computer Service post was provided by Eli Lucas. Eli can be reached at eli@onsitenola.com. Onsite Computer serves the Microsoft computing needs of small businesses throughout the Greater New Orleans area including Uptown, Lakeview, Broadmoor, Mid-City, Metairie, Jefferson, Kenner, Westbank, French Quarter, and the Warehouse District. Please visit our website for New Orleans Computer Service.

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