Market Jitters Bring Volatility & Uncertainty

Last week my office huddled together in the conference room to discuss the looming correction in the Dow Jones Industrial Average. A market correction is sometimes defined as a drop of at least 10%, but not more than 20% over a short period of time. The major difference between a bear market and a correction is magnitude and duration. Bear markets last much longer, and the magnitude of loss is greater. Last week, during a wild day of trading, the Dow briefly hit a level which was 10% below the high of 14,015 which we reached on July 19th. Fortunately, the market has shown a bit of strength–partially aided by some emergency policy decisions of the Federal Reserve Bank–and moved up a few hundreds points since its lowest levels. So what should you know? And what should you do?

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Charles Schwab to Focus on Younger Investors

Would you consider it worthwhile for major brokerage firms to focus marketing dollars and valuable time on investors in their 20’s and 30’s? Perhaps more squarely phrased: Does this demographic have any money to invest? If you simply view the past behavior of major financial firms, you’ll find them targeting mostly those aged 50+ in terms of product construction, speaking engagements, and the direction of marketing dollars. An interesting example lies in the prime advertising spaces purchased by financial firms showcasing aging professionals relaxing by the beach after a seasoned advisor helps them quantify and realize their retirement dreams. The implication here is that retirement is a hot topic among aging professionals who seemingly have big bucks. Besides the fact that they are passing what we call “accumulation phase” and quickly entering the “distribution and gifting phase,” many are also the beneficiaries of inheritances left by those passing away in their 80’s. So, why are some financial firms shifting their focus over to a younger and less profitable generation?

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