You're Still In Kansas, Toto


	Dorothy thought she wasn`t in Kansas anymore…but she was. It was all a dream. The entire time she thought she was in Oz, she was really back in Kansas. She just didn`t know it. The same may be true for investors. The 1990`s have been the investment equivalent of Oz, a new world full of new and kaleidoscopic profits. Making money this decade has been easy for some investors(although not all). Other than a few short-lasting bumps, the stock market has advanced in such numbers that the U.S. has never known. Many investors appear to have forgotten that past performance does not guarantee future results -- that in the market, what goes up can and often does come back down.
I COULD GET USED TO THIS!
	This is the greatest bull market in history. Many stock market investors have been enriched beyond their wildest dreams. According to recent polls, a lot of investors think these easy profits are going to continue indefinitely. A trio of professors who specialize in a new field called behavioral finance, have discovered that only 1% of investors consider the possibility of loss prior to making a mutual fund investment. If that doesn`t describe overconfidence - I don`t know what does. The reality is that the stock market does not go straight up. And returns of 20%-plus for three years in a row are not normal. Into every (stock market) life, a little rain must indeed fall. Mutual funds do involve market rist, and that includes fluctuating returns and possible loss of principal.
REVERSION TO THE MEAN.
	Here are some hard historical facts: the stock market goes up 2 out of every 3 years and the long-term average annual return for the stock market is around 9%. Ask any statistician - the stock market will almost certainly revert to its historical mean. That`s a fancy way to say that the stock market will either have to (a) suffer through some difficult times or (b) go through a several year period of no or little gains. The important questions to ask yourself are: how will you react to a bear market and what strategies will you employ to try to soften the pain? The stock market is a wonderful vehicle to accumulate long-term wealth. And despite its recent performance, the stock market will go down someday. In fact, it will probably go down a lot. We just don`t know when. Oz was fun, but Dorothy couldn`t stay there forever. The stock market can`t stay in the Land of Oz forever either.

Past performance is no guarantee of future results. This material is provided for informational purposes and is not intended to provide specific investment advice. Rather, it is intended to be educational and supplemental to an ongoing Investment Advisory relationship. It contains our current opinions and those are subject to change.

Information and graphs are derived from sources deemed to be reliable, but are not guaranteed. Investing involves risk, including but not limited to loss of principal. This is not a solicitation to buy or sell any security, strategy or product. And, the principals, associates and/or employees of T/R Financial Management Group, LLC may have positions in any or all of the securities mentioned.

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