By Joe Smalley, AIF®

Summer, 2011

Last weekend I went to Canada for an annual golf weekend I have attended for the last five years.  I love that trip.  Mind you, I’m a terrible golfer.  But it’s not about the golf, odd as it seems.  It is about the friends that go, the jokes we tell, the junk food we eat, the good Canadian beer (Alexander Keith’s is a favorite), the cards that we play late into the night, and the occasional lucky golf shot.  And I like the fact that when I’m standing over the golf ball, I’m not thinking about everything else that is going on in the world. 

Reading the newspaper, watching CNBC, or even just scrolling on your iPad this past week, you may rightly be concerned about your investment portfolio.  After all, over the past six weeks, the markets have been down pretty sharply.  As I type this, the Dow has fallen below 12,000.  There are several good reasons the markets are down, including:

  • The Federal Reserve's QE2 policy, which was designed to prop up asset prices by having the
    Fed buy US Treasuries, will be ending this month.
  • Oil costs are skyrocketing at the beginning of driving season, perhaps due to the QE2 policy.
  • The faceoff between the Secretary of Treasury and the House Republicans over the debt ceiling is coming to a boiling point.
  • The US economy is slowing and jobs have barely moved in the past month.
  • Bailouts in Greece, Ireland, and Spain - and the fear of contagion - are paralyizing Europe.
  • Middle East revolts are causing political instability around the world.

With all of this negative news, it is understandable why investors are worried.  No doubt about it, times are tough right now.  If you are a long term investor, what should you do?  Here’s a good starting list:  Review, Plan, Adjust, & Monitor.


  • Review what you have
  • Review when you are going to need to turn your nest egg into a source of income
  • Review your expenses
  • Review your tolerance for risk
  • Review your asset allocation


  • Put an action plan into place to help you accomplish your goals
  • Don't know how to do that?  We can help.  Contact us to scheudule a complimentary initial financial planning consultation, or investment advice meeting.


  • Adjust your accounts if need be

- Have you changed jobs recently?  Consider rolling over your 401k into an IRA.

- Getting overly taxed on your individual, joint, or trust account?  Consider a more tax-friendly investment strategy.

  • Adjust your asset allocation to match your goals

- Too passive?  Consider adding a tactical component to your investments.

- Too domestic?  Consider layering in foreign securities.

- Too correlated?  Consider positioning some alternative strategies.

  • Adjust your focus

- If your time horizon is longer than 10 years, do not get too worried about daily or monthly moves  in the market.

- Control what you can control.

- Outsource your worrying.

  • Adjust your savings

- Save and invest on a systematic basis.

- Increase your savings every time you get a raise.

- Remember, people rarely say, "I wish I would have saved less."


  • Once you have your assets invested according to your time horizon and you have set up a systematic savings plan, monitor everything at least annually.

This summer we will likely see another round of severe volatility in the stock and bond markets.  Now might be a good time to review, plan, adjust and monitor your portfolio.  The paradox of investing is figuring out your goals and investing accordingly – even during difficult periods.  Timing the markets is hard.  Taking your eye off your goals is easy.  If you have any questions on how to allocate your portfolio this summer, or if you would like to put a plan in place, please give us a call.  And as June runs into July and August, keep your focus where it should be – on your long term goals, not the short term fluctuations of the market.  It’s like my golf partner says, the key to a good round of golf is keeping your head quiet.  Maybe the same advice can be used for investing, too.


Joe Smalley, AIF ®

Smalley Investments


Asset allocation does not guarantee a gain or prevent a loss.  Systematic investing does not guarantee a gain or prevent a loss.  Tax friendly investing does not guarantee a gain or prevent a loss.  Diversification does not guarantee a gain or prevent a loss.  All investing carries risk.  Please consider your situation carefully before investing.