BHC's Producer Insights
"Prepare Your Clients for the Next Big One"

For Immediate Release
Houston, Texas

The long history of markets is volatility, uncertainty and, during recent decades, meltdowns. If you have risk adverse clients and prospects, a gentle reminder of past events might be in order. While the ups and downs of the economy are a daily affair, the major events since the Civil War are a real attention getter.

1. The Panic of 1873, which closed the New York Stock Exchange for ten days. Of the country’s 364 railroads, 89 went bankrupt; widespread business failures occurred; unemployment reached 14%. The decade of the 1870s was called the Long Depression.
2. Another deep depression started in 1893 and endured until 1897. The end result was a major political realignment that became known as the Progressive Era.
3. There were panics and recessions in the late 1800s up until WWI. The Great Depression started in 1929 and ended in 1941 with WWII. Unemployment reached 24% in 1932 and millions were forced to move in search of better lives. Safety was permanently burnt into the minds of an entire generation.
4. The inflation woes of the 1970s resulted as the country grew increasingly dependent on oil importation. The national energy policy promised by Nixon has still not materialized. Inflation climbed rapidly into the early 1980s when 20% interest rates stop the up-trend. Industries dependent upon borrowed money, including housing and construction, were devastated.
5. The late 1980s and early ‘90s witnessed the S&L crisis and subsequent bailout. We now know that the widespread government deregulation that followed was the seed for turbulent economic times.
6. The dot-com bubble of the 1990s went bust in 2000-02. Markets skidded to half their previous levels, wiping out the savings of millions and littering the economic landscape with bankrupt businesses.
7. The housing bubble and greed of Wall Street gave us the Great Recession of 2007-09. Again market averages were cut in half and millions were victimized with job losses and foreclosures. What happens in the aftermath is yet to be written but we’re a far distance from normal economic times.

Along the way we witnessed Japan’s lost decade, the collapse of the Soviet Union, global hot spots of armed conflict, major deterioration of the American dollar, corporate scandals reminiscent of organized crime and ballooning budget deficits with drastic long-term effects. The economic background is abuzz with job losses, inflation, high taxes, trade imbalances, irresponsible government waste, income redistribution and seriously under-funded entitlement programs on which many depend. So, why is this historical review important?

History always repeats itself – never exactly, but enough to confirm that periodic interruptions are a way of economic life. What is the next big event? The economic disruption that makes retirement all but impossible for most, undermines the value of our money, fosters unaffordable market losses or threatens our ability to make a living! We don’t know what it will be, when it will come, how big, how long or the exact effect, but we know for certain it is coming. Could it be an energy crisis rooted in disruptions in the Middle East? Runaway inflation spawn by out-of-control government spending? Widespread bankruptcy of local governments? Will the failure of entitlement programs like Social Security, Medicare and Medicaid be the cause? Is there a major scandal now brewing? Chances are the next Big One will be caused by something unexpected, as were past economic downturns and market meltdowns. How can you help your clients?

They’ll be tempted to reach for the promise of higher returns given their recent losses and the paltry rates they’re now getting from banks. Be there to remind them that the promise of above-market returns also means above-market risks. Show them you know the investment wilderness and are committed to making recommendations that are suitable for their circumstances. Use your monthly Safe Money Advisory Newsletter, retirement webinar on DVDs, RetireRx consumer web site and BHC publications (listing you as reviewer on the back cover) to establish your credibility and build trust. The perfect storm of volatile markets, low interest rates, scandal ridden Wall Street and economic suffering has opened the door for safe money places. Take advantage of BHC’s direct mail programs to go back to your clients with new options, or to get in front of more qualified prospects. If your biggest need is more qualified prospects to see, BHC has perfect answers we’d love to tell you about.