Albemarle Tradewinds March 2016 Final Web

The Dog and the Wolf
Aesops_Fables
The Lion and the Mouse
A gaunt Wolf was almost dead with hunger when he happened to
meet a House-dog who was passing by. “Ah, Cousin,” said the Dog.
“I knew how it would be; your irregular life will soon be the ruin
of you. Why do you not work steadily as I do, and get your food
regularly given to you?” “I would have no objection,” said the Wolf, “if I
could only get a place.” “I will easily arrange that for you,” said the Dog;
“come with me to my master and you shall share my work.”
So the Wolf and the Dog went towards the town together. On
the way there the Wolf noticed that the hair on a certain part of
the Dog’s neck was very much worn away, so he asked him how that
had come about. “Oh, it is nothing,” said the Dog. “That is only the place
where the collar is put on at night to keep me chained up; it
chafes a bit, but one soon gets used to it.”
“Is that all?” said the Wolf. “Then good-bye to you, Master Dog.”
Better starve free than be a fat slave
Once when a Lion was asleep a little Mouse began running up
and down upon him; this soon wakened the Lion, who placed his huge
paw upon him, and opened his big jaws to swallow him. “Pardon, O
King,” cried the little Mouse: “forgive me this time, I shall
never forget it: who knows but what I may be able to do you a turn
some of these days?” The Lion was so tickled at the idea of the
Mouse being able to help him, that he lifted up his paw and let
him go. Some time after the Lion was caught in a trap, and the
hunters who desired to carry him alive to the King, tied him to a
tree while they went in search of a waggon to carry him on. Just
then the little Mouse happened to pass by, and seeing the sad
plight in which the Lion was, went up to him and soon gnawed away
the ropes that bound the King of the Beasts. “Was I not right?”
said the little Mouse.
Little friends may prove great friends.
Put Your Financial “Puzzle” Together
Submitted by Chuck O’Keefe
As an investor, you may be gaining familiarity with the term “market correction.”
But what does it mean? And, more importantly, what does it mean to you?
A correction occurs when a key index, such as the S&P 500, declines at least 10% from its previous high. A correction, by definition,
is short-term in nature and has historically happened fairly regularly – about once a year. However, over the past several years, we’ve
experienced fewer corrections, so when we have one now, it seems particularly jarring to investors.
How should you respond to a market correction? The answer may depend, to some extent, on your stage of life.
If you’re still working … If you are in the early or middle parts of your working life, you might not have to concern yourself much
about a market correction because you have decades to overcome a short-term downturn. Instead of selling stocks, and stock-based
investments, to supposedly “cut your losses,” you may find that now is a good time to buy more shares of quality companies, when
their price is down. Also, you may want to use the opportunity of a correction to become aware of the need to periodically review and
rebalance your portfolio. Stocks, and investments containing stocks, often perform well before a correction. If their price has risen
greatly, they may account for a greater percentage of the total value of your portfolio – so much so, in fact, that you might become
“overweighted” in stocks, relative to your goals, risk tolerance and time horizon. That’s why it’s important for you to proactively rebalance
your portfolio – or, during a correction, the market may do it for you. To cite one aspect of rebalancing, if your portfolio ever
does become too “stock-heavy,” you may need to add some bonds or other fixed-rate vehicles. Not only can these investments help
keep your portfolio in balance, but they also may hold up better during a correction.
If you’re retired … After you retire, you may need to take money from your investment accounts – that is, sell some investments
– to help pay for your cost of living. Ideally, however, you don’t want to sell stocks, or stock-based vehicles, during a correction –
because when you do, you may be “selling low.” (Remember the most common rule of investing: Buy low and sell high. It’s not
always easy to follow, but it’s still pretty good advice.)
So, to avoid being forced into selling, you need to be prepared. During your retirement years, try to keep at least a year’s worth
of cash instruments on hand as well as short-term fixed income investments. By having this money to draw on, you may be able to
leave your stocks alone and give them a chance to recover, post-correction. And it’s important to maintain a reasonable percentage
of stocks, and stock-based vehicles, in your portfolio, even during retirement – because these investments may provide the growth
necessary to help keep you ahead of inflation. Consequently, as a retiree, you should have a balance of stocks and stock-based vehicles,
along with fixed-income vehicles, such as bonds, certificates of deposit, government securities and so on.
Being prepared can help you get through a correction – no matter where you are on life’s journey.
Chuck O’Keefe is a
Financial Advisor with
Edward Jones in
Elizabeth City.
Edward Jones
207 N Water St
Elizabeth City, NC
27909-4417
(252) 335-0352
www.edwardjones.com
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