50 Years in the Market:Roads Travelled & Lessons

Learned

Prepared By: David J. Pangborn, MBA

Private Wealth Counselor

Plus

2

2008: A (Late) Happy Birthday Call

I get a call from 82 year old retired military man, and grumpy know-it-all...Herb Pangborn...with some fatherly advice for my 50th birthday (which was last November!)

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1957: A Less Than Hospitable Entry

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1957: Markets & Headlines

Markets:•The Canadian stock market is down 23%.

Headlines:•The U.S. Post Office goes bankrupt and halts mail delivery.•The Suez Canal Crisis; Soviet Union launches "Sputnik" and sparks fears of nuclear war; President Eisenhower suffers a stroke.•Elvis Presley is drafted into the U.S. Army.

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1974: Off to University

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1974: Markets & Headlines

Markets:•World stock markets drop 28% (following a decline of 8% the previous year).•Typically "safe" bonds have lost 6% of their value.•Inflation hits an all-time high over 12%.

Headlines:•OPEC Oil Crisis; worst recession since the Great Depression of 1929.•India successfully tests it's first nuclear bomb; Watergate topples President Nixon.•ABBA wins the European Song Contest.

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1981: Getting My MBA

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1981: Markets & Headlines

Markets:•The Canadian stock market loses 12%.•Bonds drop by more than 3%.•Inflation exceeds 12% (the highest since 1974).•Interest rates are over 18% (an all-time high).

Headlines:•Deep recession and massive mortgage defaults.•The Iran Hostage Crisis, political violence in Poland, Spain, Italy; and assassination attempts on President Regan, Anwar Sadat, and Pope John-Paul II.•The progressive-rock band "Yes" splits up.

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1987: Licensed to Sell (Mutual Funds)

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1987: Markets & Headlines

Markets:•Black Monday: Global stock markets plummet by 30% (worst single day since the Depression).•Bonds return less than ½% after a 3-yr average 22%.

Headlines:•Multiple bankruptcies in the U.S. banking and investment sector, and American Motors goes under.•Iraq attacks a U.S. warship killing 40; massacres in India and Saudi Arabia.•Liberace passes away.

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1994: Securities & Marriage-Licensed

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1994: Markets & Headlines

Markets:•The Canadian stock market loses 3%.•Bonds lose more than 9% (worst-ever).

Headlines:•NAFTA: death of Canadian economy predicted.•Massacres in Serbia, Rwanda; terrorist attacks in Israel, Brazil, Japan and U.S.•Justin Bieber is born.

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2001: Welcome to Great-West Life

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2001: Markets & Headlines

Markets:•The Canadian stock market drops 15%.

Headlines:•Enron bankrupt: largest in U.S. history.•The World Trade Centre terrorist attack; U.S. invades Afghanistan; massacres in Israel and Bosnia.•George Harrison dies.

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2007: I Turn 50 (and Another Disaster)

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2008: Back to the Future

Markets:•The Canadian stock market drops 35% (worst year).•Oil hits $100/barrel for the first time.

Headlines:•Sub-prime mortgage crisis, massive home defaults in U.S., numerous banks, investment, and car companies bankrupt worldwide.•Massacres in Israel, Congo.•Taylor Swift wins Album of the Year.

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2013: Where to From Here?

Markets:•All-time low interest rates (4-yr average about ½%).•Lingering nervousness following 2008 and 2011 stock market declines.

Headlines:•Greece and Cyprus bankrupt, Euro Crisis.•Iran embargo, North Korea nuclear threats, Boston Marathon attack.•Justin Bieber wins a Juno.

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What Could Have Been?

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1957 1974 1981 1987 1994 2001 2008 2013

200 4551020

2008

3704

5684

9560

11430Balanced Portfolio

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What About the Alternatives?

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12000

1957 1974 1981 1987 1994 2001 2008 2013

Bank A/C

Gold & Oil

Balanced Portfolio

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Lessons Learned