For the past several months we’ve seen encouraging signs that the economy may be turning the corner. The stock market has experienced some welcomed gains, and home prices are stabilizing in many areas.
While it appears that we are returning to a healthier economic climate, I do not expect a return to business as usual. The financial services industry has undergone a dramatic change. We have seen some of the biggest and brightest firms on Wall Street experience a collapse of not only their business model, but also client trust. In this environment of economic uncertainty it’s natural for American families to feel uneasy about the fiscal health of companies they rely on for their financial security. I am pleased to report that First Command remains financially strong and fully committed to serving your long-term goals and needs. I credit much of our current fiscal health to the time-tested approach advocated by our Financial Advisors and embraced by you, our valued clients. During the past half century the compelling arguments in favor of dollar cost averaging and a “Pay Yourself First” approach have convinced thousands of our clients to invest on a regular basis in markets both good and bad. Many Americans are rediscovering the value of this approach and dusting off the frugal financial habits they neglected in recent years. The First Command Financial Behaviors Index™ reveals that middle-class American families have responded to the economic turmoil by saving more, spending less and trimming debt. Consumers have been cutting back in a variety of ways, including reducing leisure activities, clothing purchases and household goods consumption. Many U.S. households have indicated that they are shopping at discount stores, increasing coupon use and buying generic. There are signs that these frugal behaviors may be here to stay. One in four survey respondents say they have cut back for good and roughly half say they have embraced frugality as a way of life.
Our research and experience also reveals that the assistance of a knowledgeable professional can encourage the disciplined, lifelong behaviors that enhance financial well-being and long-term security. Many of you have responded to the recent turmoil and economic uncertainty by working closely with your Financial Advisor to develop effective strategies to protect assets and provide for the financial security of loved ones. Even when the market was at its lowest, you continued to trust us with new investment dollars.
I believe you have been confident in acting on our recommendations because you recognize our client-first commitment. We spend considerable time doing the due diligence to ensure that the funds we recommend to you are financially prudent, have a consistent investment philosophy and offer sound professional management. We’re confident the performance of these funds will continue to improve as investors regain their confidence and return to the market. (Of course, there are no guarantees as risk is inherent in the market.)
As we begin to move into the next stage of the economic cycle, I congratulate all of you who avoided the consumer excesses of recent times and are embracing frugal financial habits and fiscal conservatism with a financial plan through your Financial Advisor. I urge you to continue to follow this path to fiscal health. Don’t follow the lead of those consumers who will hasten back to the spendthrift ways that got our economy into trouble in the first place. Now is the best time to pursue your financial goals and lifetime dreams. Our Financial Advisors, their assistants and our Home Office staff are ready and eager to help as we maintain our steadfast focus on the highest standards of financial planning. If you’ve felt the bite of the market in your finances and find yourself reluctant to continue investing in your future, I encourage you to push back the gravity of your fears and dare to embrace the new opportunities that lie before you. For it is my strongest belief that if you choose to focus on the silver lining in the clouds above us, you will be doing yourself and your family a great service, and you will find new possibilities for achieving a secure, abundant and fulfilled life.