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After over three years of falling stock prices, few investors in the U.S. are unaware that we are experiencing one of this country's worst bear markets. The last time equities had been generally trending downward for this long was in the early years of World War II.
Many say that, finally, 2003 will prove to be an up year for the markets. They may point out that in almost every third year of an American president's term the markets are positive. They also suggest that, despite the many instabilities we face today, conditions are not nearly as bad as in the Great Depression, the last time we saw stock markets fall four years in a row. Thus they figure there's insufficient reason for share prices to keep heading south for yet another year.
But, the fact is, no one really knows. Any number of possible eventualities, from a major new terrorist attack on U.S. soil, to unexpected difficulties in the conflict with Iraq, a natural disaster, war with North Korea, an oil crisis, or something else entirely unforeseen, could jolt investors' confidence yet again and lead to further plummeting prices from which markets might not recover until 2004 or beyond.
With uncertainty prevalent for both holders of bond assets (at risk from rising inflation or interest rates or from selling by foreign investors if our debt load substantially increases and/or the dollar's value declines) and stock securities, some may wish to look into insurance company annuities offering guaranteed minimum annual returns (6% available currently, per my brother, Frank, who manages a branch of the Raymond James brokerage), with the possibility of higher returns if the markets after all do trend upward. If you wish to explore such an option, consult your financial advisor or insurance agent.
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