Monday, August 29, 2011

Don't Invest in Stocks or Bonds Today. Invest for Income.

I know lots and lots of people. I am sure you do as well. I know people from where my kids go to school, from where we worship, clients, lawyers, doctors, teachers, retail store owners, non-profit personnel, people from my neighborhood, from Facebook and Linkedin. The list goes on and on. And, you have your connections as well. I'm sure your web casts as far as mine. And, here's the thing. I don't know one person out of this long list of characters who is not paying his or her mortgage, or car loan, or business loan. Nor do I know anyone who is not paying his or her lease for office or warehouse, or business equipment, or is in default of any business loan. And, I am going to venture to say that you do not know anyone or at least not many people who have just walked away from their obligations, and are willing to sacrifice their assets and security.

Small businesses pull themselves up from their bootstraps, innovate, persevere, streamline, work more hours, and maximize efficiencies to survive. Survival for a business means meeting its obligations. The world has great economic challenges today, without question. Fear, uncertainty are today's mainstays. News at times is dire. The media evokes sensationalism, and sensationalism can lead to irrationality and panic. Regardless whether the stock market bounces back from what many might deem the abyss, I do not think this is a period to concentrate your investments in the stock market. This is a period to invest in areas that have withstood the test of time, including the Great Depression of the 1930's and the Great Recession of 2008. Even in the worst of times in the Great Depression and Recession, the vast majority of business owners paid their mortgages and business and equipment loans. Very, very few actually default. A business would much rather incur a round of layoffs and furloughs rather than to have its assets taken over by its lenders.

We keep hearing about all the cash that companies today have in their coffers, and the strength of their balance sheets. Particularly because traditional bank sources of lending have been curtailed as a result ever-increasing regulations, real opportunities exist right now to finance businesses in a variety of areas.

Our clients are taking advantage of this climate by participating in a variety of investments that are providing very strong cash flow that will continue regardless what happens with the stock or bond markets. Today might not be the time to load up on traditional stock and bond investments. Markets are sometimes risky, volatile, and irrational. Today is a time to learn about investments whose performance is not linked to the stock market. Today is a particularly important time to invest in areas that produce income and cash flow, not necessarily linked to stock market gyrations. For both personal assets as well as retirement plans, today is the time to invest with us.

So, if you are interested in learning more about the specifics of any of these opportunities, you should call or email me.

Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor's portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential loss.

The opinions voiced in this material are for general information and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, you should consult a financial advisor prior to investing. Past performance is no guarantee of future results.