A financial advice firm which follows a very similar approach to ours in the USA is Merriman Berkman Next.  You may have noted that we have made a number of references to items on their website and included their website www.Fundadvice.com as a recommended website in our email newsletter.

Today they have published a question from a concerned client along with the response from Paul Merriman, founder of the firm, - My finances are getting uncomfortable. What do I do now?  It is well worth a read.

In summary, the client asks whether it is foolhardy to keep hanging on to equities. Merriman responds by stating that:

- he does not know the future and therefore does not have a perfect answer
- he openly acknowledges that the problems facing the global economy are challenging ones without quick, easy fixes but they do now have everybody's full attention.
- he believes that the past, which is our only indicative guide, shows that diversification will be an investor's friend going forward
- it might be time to reconsider asset allocations and how much risk needs to be taken on to reach future goals
- going to cash reall is a question of the philosophy you follow - are you going to follow a buy and hold strategy going forward or follow a market timing strategy?  He suggests that market timing is actually much more of a psychological challenge as you now need to be constantly evaluating when to sell and when to buy

Merriman's conclusion is that every investor has two primary jobs - to manage your risk and to manage your emotions.

Both are being put to the test in the current climate and it is important to be talking through both with your financial advisor if you are questioning either.

Regards,
Scott Keefer