Friday, February 27, 2009

If Your Hope is in the Stock Market....

There is a very interesting article, by Jason Zweig, on the Wall Street Journal website. You can access it at the folowing link:

For those unlucky enough to not have a defined pension plan, our 401k's and IRA's have long been invested in the stock market. Until October, Modern Portfolio Theory promised a relatively secure retirement, if one was well diversified and had an asset allocation appropriate to once's age and risk tolerance. Until October, that was the promise and the hope.

Until the 1970's, almost everyone who worked full time had a defined pension plan. This meant that they would receive a definite monthly payment, annually increased for the cost of living, as long as they lived, upon retirement. This was a normal part of compensation for one's work. Then companies became more interested in the concept of a 401k, where both employers and employees made contributions. Generally these contributions were invested in the stock market. Congress had originally intended the 401k plan to act as a supplment to defined benefit plans and social security. Gradually, they became the only retirement savings option for workers. Currently, the average Joe is probably down about 40-60% in his retirement savings. His hope for retirement security is also down, with those numbers.

Jason Zweig has some very worrying things to say about investing in the stock market. Generally speaking, these are things that your financial planner will not share with you. It is a very interesting article.

In this market, financial planners are as confused as the average Joe about investment strategy and what the future might hold. Just listen to CNBC & the evening news. Every expert seems to have a different idea about what the individual investor should do.

I have been spending alot of time lately, wondering what God is trying to teach us thru these circumstances. I cannot help but think that these current circumstances have something to do with where we have chosen to place our hope.

Is our hope for the future in our stock portfolios, or, in God's eternal Kingdom?


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