Paul Ferraresi

The housing crisis and credit market upheaval that began last year have been creating a roller coaster ride for market participants with equity markets down across the globe by 30% or more in the last year. During times like these, emotions can overwhelm sound decision-making as investors panic and flee to the exits.

Ironically, this market also leads us to believe that there are now excellent opportunities in the market for investors that can remain disciplined and take the longer-term view necessary to see beyond the current economic problems.

I wish I had some eye-opening quick fixes for you, but frankly that’s exactly what got Wall Street into this crisis. We believe that turbulent times in the market are the most important times to stick with disciplined, conservative investment principles that have worked well over numerous market cycles.

By following the basics, investors can position their portfolios to outperform when the fear in the markets ultimately subsides. The flip side of volatility is opportunity for patient investors who are focused on finding undervalued assets with good growth prospects that the market will recognize in the next three to five years.

Since equity markets are near their average pullback in past recessions, we believe that the fundamental trend of rising equity markets across market cycles will pull markets upwards over three to five years. The markets will return back to their long-term trend line once it becomes clear that the negative effects of the housing and credit bubbles are diminishing.

While it may be difficult to focus beyond the latest headlines of bailouts and bank failures, with a prudent and patient approach, we believe that investors will look back at this time as one of the rare buying opportunities of a lifetime – so work with your advisor who can help you take full advantage of this great situation.