Lobsters may feel no pain...

February 15, 2005

Hello,

Lobsters may feel no pain, but investors sometimes do. I have been asked often recently, is it really worth investing when the market has been so uninspiring the last 4 years? After all I could invest in real-estate and am certain to get rich. Certain…., as certain as the dot.com millionaires, as certain as an English major getting paid ½ million dollars a year in stock options in 1999, as certain as that local start up is going to be the next Microsoft? Real-estate always goes up, right? Hummm guess you didn’t buy in 1987. Guess you didn’t buy a ski condo in Vermont either? Seems the same people buying dot.com’s in the fall of 1999 are involved in real-estate speculation right now. Don’t hear Warren Buffet talking much about real-estate?

Every month do you know what your house is worth or do you think you know what your house is worth? Have you ever spent money on a new roof, a new floor a washer or dryer? Real-estate has those ups and downs just like your stock portfolio it is just not so readily obvious. Modern technology has given you minute by minute updates on your stocks and bonds, but alas not yet on your real-estate. Because you have a snowy winter and have to shovel a drive way more often than last year does it mean that it will always snow this much? You simply know that if you take care spring will come.

My point being the stock portfolios, like houses often need maintenance and things don’t always go your way, but short term ups and downs hardly affect a long term investment plan. The simple fact is the power is in the plan, buy a house pay off the mortgage, open and IRA make yearly deposits, or max out your 401k .Yes there will be volatility, ups and downs, day to day and month to month thru snow days and leaky roofs but long run the power is in taking the action and follow through on the plan.



James