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Your guide to profitable and socially responsible investing

By Judith L. Seid,

October 1, 2008 (La Mesa) -- The
crisis on Wall Street caused by the bursting of the real-estate bubble has
now lasted 13 months and has caused far more damage than analysts initially

Three of the five biggest American investment banks have failed or been bought
since March, and Fannie
and Freddie
, the giant mortgage companies, were effectively nationalized earlier
this month.


Plunging housing prices have also crimped consumer spending and slowed the
overall economy, which has lost 700,000 jobs this year. Even so, investors
have generally seemed hopeful that the economy would avoid a full-scale recession.
Now that confidence may be fading.

Monday September 15th markets opened with the news of Lehman Brothers’ filing
for bankruptcy and Merrill Lynch selling to Bank of America, creating a swift
sell-off in the market as fears that the crisis in the financial industry could
stun the broader economy. Investors drove stocks down almost 5 percent sending
the Dow Jones industrial average and Standard & Poor’s 500-stock
index to their lowest levels in two years, the biggest one-day point drop since
the terrorist attacks in 2001.

The panic caused by the major moves in the financial sector led the prices
of Treasury bills and notes to soar as investors sought safe places to park
their capital. Oil prices dropped sharply on Monday, on concerns that demand
for energy would shrink as economies slowed down.

Not only do economists and strategists agree that the market volatility is
likely to continue for some time, in addition, since this is an election year,
markets are likely to remain unpredictable until after the election is decided.  This
isn’t a fun period for most investors and we suggest you follow these

Here are “Ten Things You should Do During a Market Crisis:”

  1. Stay Calm – Be
    careful not to make rash decisions due to overwhelming fear or anxiety.  If
    changes are necessary, make them based on a diligent and rational foundation.
  2. Check on your insured deposits,
    like CDs
    – Have no more than $100k per institution, as
    this is all that FDIC insurance will protect.
  3. Review
    your overall portfolio allocation
    – Do
    you have adequate diversification and an appropriate investment mix for your
    stage of life and your needs for portfolio income?
  4. Take
    advantage of this opportunity to do tax loss selling
    – Consult
    with your trusted financial advisor to see if this is appropriate in your
  5. Take advantage of this opportunity
    to reposition investments
    – A good time to review and
    possibly reposition you portfolio is when prices have dropped as your capital
    gains may be less and capital gains tax rates are still at historic lows. 
  6. Continue
    to save and invest
    – Do
    not let short term market conditions stop you from putting aside money in your
    savings and investment plans.  Always remember to “pay yourself
    first” by putting away a minimum of 10% of your income
    into your 401k’s, Roth-IRA’s, 403b’s, Simple-IRA’s,
  7. Do long range financial planning – Make
    sure you know where you stand and that you have planned for how you will
    reach your long term financial and lifestyle goals.
  8. Evaluate
    your risk management
    – Are
    you adequately insured in the event of an unlikely illness or death?  Do
    you have long term care insurance, adequate life insurance, estate planning
    documents in place, etc.  Have an insurance and estate planning review.
  9. Analyze your portfolio to
    make sure your investments are aligned with your values
    – You
    know what your values are…do you know what you own in your portfolio?
  10. Be thankful for all the things in your life that are
    – Focus on your strong and supportive friend & family relationships because these are more important than money.

Judith L. Seid, President and founder of Blue Summit Financial
Group, Inc,  is a certified financial planner who has actively used
Socially Responsible Investing (SRI) for her clients since 1992.  She
firmly believes that “We can influence corporations to change their
policies by avoiding investments in irresponsible companies and by seeking
investments in companies with positive practices and products.” Socially
responsible investing (SRI) exists for investors looking to use the power
of financial investment to create sustainable social change.  For
more information on Sustainable Investing, contact Judith at Blue Summit
Financial Group in La Mesa, (619) 698-4330;

through Cambridge Investment Research, Inc. (CIR) a Broker/Dealer - Member
FINRA/SIPC.   Investment Advisor Representative, Cambridge Investment
Research Advisors, Inc., a Registered Investment Advisor.    Blue
Summit Financial Group, Inc. is not a subsidiary or affiliate of CIR.