October 2008

Lessons Learned

Ric's important "lessons" consumers should keep in mind during turbulent times:

1. When investing, assume the worst. Could you live with it?

a. Don't buy investments you don't understand.
b. Don't buy company stock in your retirement plan.
c. Don’t accept company stock as compensation instead of cash.
d. Don't buy a house you cannot afford.

2. Maintain diversification

a. Do not buy individual securities.
b. Never make big bets with your money. Putting it all in your home or all in the bank is as big a bet as putting it all in one stock.
c. Build a portfolio based on your situation.

3. Have ample cash reserves

a. Be sure the cash is safe. Use only Treasuries or funds of Treasuries, and stay under the FDIC limit.
b. Never chase yield.

4. Be skeptical about what you read, see or hear. The media isn't smarter than you.

5. Don’t panic. Have faith in our nation, in our financial system and in history. Maintain a long-term focus, and remember that wealth is created during periods of uncertainty.

If you follow the above, you have no need to panic.