JUST THE BUSINESS CYCLE OR THE END OF AN ERA?

The Noah Rule. It doesn't help to know it's going to rain unless you actually build the ark.

It's More Than The End of The Old Business Cycle. It Could Be The End of An Era. We may never go back to where we were and that may not be such a bad thing. We have concentrated so much of our lives on consumption that we don't slow down and consider what is important. Having been born at the tail end of a huge depression, I can remember what it was like before we became so affluent and it wasn't that bad. It's not that I would like to go back, maybe just slow down a bit and concentrate on what's important. Making and spending money can be fun but so can spending time with friends and family.

It's Time To Start Building Your Ark. I don't say you should stop spending money, just slow down a bit. I recently got an e-mail picture from a long-term client showing him sitting on a tractor-mower. He recently retired from almost 40 years in the airline industry. He now works at a golf course doing what we might call blue collar labor. Rather than feel sorry for him, I admire his willingness to do this type of work when he can certainly afford not to. As an added bonus, he also gets to play golf free. Since that is his real passion, the benefit is probably more important than the money he makes. My hat goes off to him.

Look At Your Investment Portfolio. I still think you have to emphasize cash flow. Dividend paying stocks and high quality corporate bond funds can keep your cash flow up and, while you can't afford to ignore share prices, you can take some comfort when you get those dividend checks. This is particularly important if you need to withdraw from your account to fund your living expenses. Trying to live off capital gains can be dicey since they are several orders of magnitude more difficult to predict than dividends. We also can't afford to ignore the potential for renewed inflation due to the anticipated huge deficits. One of the better hedges against this would be various kinds of real estate investments, especially REITs that are not over-leveraged and have low payout ratios.

Here's To My Favorite Holiday. I've always loved July 4th, especially in Colorado where the weather is usually pretty close to perfect. Before this holiday is over, we will have 15 or 20 family members up here. We will all over-eat, consume large quantities of various beverages, play music, and watch fireworks. I will be in Denver towards the end of this month and hope to see many of you then.