Lost in the Panic: An Incredible Buying Opportunity, Says Ric Edelman
For Immediate Release
October 13, 2008
Media Contact:
Mark Bagley
703-227-0541
mbagley@RicEdelman.com
FAIRFAX, Va., Oct. 13 -- The frenzy over the largest one-week percentage decline in the history of the Dow Jones Industrial Average is obscuring the incredible investment opportunity at hand, according to renowned financial advisor Ric Edelman.
“While we do not know where or when the Dow index will hit bottom (and you should ignore anyone who claims to know!), I believe this is one of the greatest buying opportunities in history,” said Edelman, chairman and CEO of Edelman Financial.
Consumers who are in a position to do so should exploit today’s low prices, said Edelman. “With the Dow down 35% from a year ago, this is the mother of all blowout sales — don’t miss it!”
The opportunity to capitalize on the down market may be brief, said Edelman, as the market selling frenzy may end soon. “The selling has been substantial for the past few days, despite the fact that there has been no news development of any significance. It’s a selloff driven purely by panic.”
“The sellers have been outnumbering the buyers, causing prices to drop dramatically. But once these emotion-driven sellers are done selling, they are out of the game — they can’t cause prices to drop further because they have no more shares to sell. That leaves all the shares in the hands of those who did not give in to panic.”
Edelman said history shows that deep market declines are eventually followed by significant upturns.
“In 1931, during the depression, the stock market fell 43%. The following year, it fell another 8%. People just assumed, ‘It’s going to be this way forever.’ But in 1933 — in the depth of the depression — the Dow rose 54%.”
“Or look at 1941, the start of World War II, when the stock market fell 12%. The following four years saw annual increases of 20%, 26%, 20% and 36%.”
“Those are just two of the more prominent examples,” said Edelman. “The same thing has happened with every market decline, right up through the bear market of 2002.”
Those who decide they won’t move in until after the market rebound occurs will miss the upside, Edelman said. “When the markets recover, they will recover sharply and quickly. We never know that the markets have recovered until after the recovery has occurred. Only with the benefit of hindsight do we realize that there’s been a turnaround. By then, the procrastinators have missed it.”
“Many of the people who got out of the market last week, at the low, will get back in later, at the high. And these same people will wonder why they never seem to make any money.”
Edelman is author of the best-selling The Lies About Money, which is being released in paperback this week. He also hosts The Ric Edelman Show, heard every weekend on leading radio stations coast-to-coast.
Edelman Financial is a marketing name for two affiliated registered investment advisers. Edelman Financial Services LLC primarily serves the Washington D.C. area; Edelman Financial Advisors LLC serves clients nationwide via its own advisors and unaffiliated registered investment advisers. Sanders Morris Harris Group (Ticker: SMHG) is majority owner of EFS. Ric Edelman is majority owner of EFA and minority owner of EFS.
Ric Edelman is an Investment Advisor Representative and offers advisory services through Edelman Financial Advisors LLC and Edelman Financial Services LLC, SEC registered investment advisers. Ric is also a Registered Representative of and offers securities for Edelman Financial Services LLC through SMH Capital Inc., an independent broker/dealer, member FINRA/SIPC.
The opinions expressed herein are those of Ric Edelman and not SMH Capital Inc., or Edelman Financial Services. Past Performance is not indicative of future results.
Rescue Your Money, written by award-winning financial advisor Ric Edelman, is your personal investment recovery plan.
