Merle DiVita, our January speaker for the Ventura County Professional Women’s Network--VCPWN(with a few good men), said that, “I believe what is going on today is all part of an economic cycle and much sooner than media would have us believe, we will be on the upswing.” Merle, a Senior Vice President-Wealth Management with Smith Barney and a Certified Financial Planner as well as a Certified Investment Management Analyst here in Oxnard, brought her knowledge from 29 years of experience in her industry. She was also a founding member of VCPWN almost 26 years ago.

Merle brought us many ideas and articles to help us not only understand what is going on in our economy, but to also help us protect and grow our savings in this volatile market environment. Merle explained that economies are living breathing entities and as such will inhale and exhale from time to time. Using a combination of asset allocation as well as asset diversification is one process Merle suggested to smooth out the inevitable ups and downs of the economy and the markets. This includes dividing money between stocks, bonds and cash equivalents (money market funds and the like).

Merle gave us copies of the famous investor, Warren Buffett’s October 17, 2008 Op-Ed column, in the “New York Times” titled” “Buy American. I Am.” He says that, “I’ve been buying American stocks. This is my personal account I’m talking about. If prices keep looking attractive, my non-Berkshire net worth will soon be 100% United States equities.” According to Buffett, “The stock market news will be good. In the 20th century, the Dow rose from 66 to 11,497.”

Merle explained that the stock market moves up before the economy recovers because of the expectation of the improvement to corporate earnings and the coming economic recovery. She believes that the stocks of U.S. companies have a place in everyone’s portfolio. No one can, nor should they try to ‘time’ the markets. The percentage of stocks in one’s portfolio depends on their age, risk tolerance, and time to retirement.

Within the new federal stimulus package that President Obama has presented (and that the House of Representatives just passed on January 29, 2008), programs will be created to help people keep jobs and create new jobs thus assisting the economic recovery. Merle said it will take some time for the stimulus programs to work, but work they will. The Federal Reserve, the U.S. Treasury and the FDIC are doing everything possible to help us. This is first time, ever, that fiscal and monetary policies have coordinated efforts to keep the financial engines of our country working. The response has been rapid and robust. And it is starting to work.

Another article Merle shared with us was from Paul Orfalea & Lance Helfert in their November 2, 2008 column for the “Ventura County Star.” They state that: “Bear markets are not uncommon. They are all part of the economic cycle.” Their article, also mentions: “ Treasury Secretary Henry Paulson can recapitalize the banks, but he cannot force them to lend money. And they won’t lend money if they fear borrowers cannot repay them in the future. Consumers will not spend if they fear the future. Companies will not hire if they fear the future. It’s a cascade of self-fulfilling prophecies.”

Orfalea and Helfner also mention that, “We do not know how our economy or the prices of our stocks will react next Monday, but we do know that the U.S. economy has been tested time and again, and in every case has proved resilient. The way we look at it, there are three doors to choose from—Yesterday, Today, and Tomorrow. Stocks are clearly cheaper today than they were yesterday, and if we believe in tomorrow, then today should prove an extraordinary time to own stocks.”

Merle agrees.