Client Communication Briefing

October 8, 2008

I spent the last few days at the Financial Planning Association's national conference in Boston. The timing of this conference was excellent and, needless to say, with more than 3000 financial planners present there was a great deal of insights to gain and share. While highly engaged, none of us could escape what was happening in the global markets and we continued to monitor events as they unfolded.

I want to recognize the emotional turmoil these conditions may be creating for you. These certainly are the times that test our fortitude and I acknowledge fear, uncertainty, and doubt makes an uncomfortable companion. Many of you may be asking questions like “Should I sell?” or “Should I get out of the market before it gets any worse?” The bear market of 2000-2002 doesn’t seem far enough away for us to once again find ourselves asking these types of questions. As I reflect on those difficult years and process what we’re dealing with today, it’s hard to feel optimistic…at least at the moment. Trust me when I say I empathize with the feelings that are gripping our nation and quickly spreading around the world as a result of this crisis.

Our brains are hard wired to detect danger and fear. When outside stimulation causes those kinds of emotions, our brains react by shutting down clear thinking. We often choose an anecdote of speed over accuracy, giving us the illusion of control. Close to 30 years in this industry has shown me the desire for people to want to sell is the strongest at or near the actual worst times to sell. The downstream implications of emotionally driven decisions can have serious impacts. Studies have shown that over any ten-year period of time, investment returns always outperform actual investor returns because of the inappropriate reactions of investors. That’s a compelling track record.

When the market rebounds, and history shows that it will, no one will be able to determine the exact right time to buy back in. Yielding to the emotion of the moment can lead to selling low and buying back high when the market recovers. Fighting the urge to let emotions dictate your actions during the darkness of today, may actually position you and your family with increased peace of mind when tomorrow finally looks brighter.

We stand by our fundamental value of being fully present for you when you’re celebrating or when things aren’t going so well. We are here to help you with your questions and concerns.

With my regards and appreciation,

Michael P. Haubrich