• Living Trusts

• Term Life Insurance

• 6% Fixed Annual Return

• Medicare Insurance

• CFO Service (for business owners)

Market exhales of 5% occur with such regularity that these pullbacks should simply be expected rather than feared. The typical calendar year is littered with 3-4 of these. Especially in this consolidation period that the stock market is in.

While the 5% sell-offs can be expected to avail themselves 3-4 times a year, the 10% declines occur less often, about once per year going back to 1928. This is based upon a lot of market data, and obviously there are years in which 10% swings seem to occur monthly.

The vast majority of market dips are just that, dips, and are not in fact major trend changes in the market place. Less than 1 in 10 result in a bear market move of more than 20% lower. And so while it is certainly possible that the current market environment progresses toward "correction" status, or even becomes a "bear market," it is by no means a course already charted by events to this point.

We are still on offense and will keep following the system. Stay tuned!

Have a great rest of the week!

James Bresnahan
Registered Investment Advisor
www.jbresnahan.com
james@jbresnahan.com

Hello Clients and Friends, No one can dispute that Warren Buffett is a good investor---he's made a ton of money over many years and it's been well-documented. He holds court periodically and even his public calls have been pretty good, like his "Buy American. I Am." editorial in the New York Times on October 16, 2008. You could do worse than trying to emulate Warren Buffett. So what is St. Warren actually doing? Well, fortunately some college professors did the heavy lifting. They analyzed Berkshire Hathaway's quarterly filings from 2006 all the way back to 1980, 2,140 quarter-stock observations. In the words of the professors: ...we observe a median holding period of a year, with approximately 20% of stocks held for more than two years. At the other end of the spectrum, approximately 30% of stocks are sold within six months. Yep, Warren Buffett has 100% turnover. He blew out 30% of his portfolio selections within six months, and held about 20% of his picks for the longer run. That is active trading by any definition. A mythology has grown up around Mr. Buffett, that he has a somewhat magical ability to select stocks and then holds on to them forever. The truth is far more pedestrian, and encouraging since it is something any investor can do. He might be holding on to what is working, but his portfolio holdings are pared relentlessly. If I had to guess, I suspect Warren Buffett is simply doing what every good investor does. He's using his best judgment to select stocks and then cutting the losers and letting the winners run. (The casting-out process used in our Systematic Relative Strength portfolios does exactly the same thing.) There's no glory---or capital gain to be had---in holding an underperforming piece of garbage for the long run. Mr. Buffett's stock selection may be above average, but his genius is more likely in his discipline. Don't be conned by the myth of buy-and-hold. Even Warren Buffett isn't doing it. Hang on to the winners and get rid of the losers! Send me your comments by clicking on comments section below. I'd love to hear from you! James Bresnahan james@jbresnahan.com www.jbresnahan.com

Dear Friends and Clients,

 This weekend I started facilitating another Dave Ramsey Financial Peace University class. However, before there was a Dave Ramsey, there was Benjamin Franklin. Many people have commented about how much they like the following quote from Benjamin Franklin. I like it so much I included it in my book on Financial Wellness.

“There are two ways of being happy. We may either diminish our wants or augment our means, either will do, the result is the same; and it is for each man to decide for himself, and do that habit which happens to be the easiest. 

 If you are either sick or poor, however hard it may be to diminish your wants, it will be harder to augment your means. If you are active and prosperous, or young, or in good health, it may be easier for you to augment your means than to diminish your wants.  

“But if you are wise, you will do both at the same time, young or old, rich or poor, sick or well; and if you are very wise, you will do both in such a way as to augment the general happiness of society.”  

Benjamin Franklin

Have a great week!

James Bresnahan
Registered Investment Advisor
www.jbresnahan.com