The August Wesletter discusses investing during a recession and how to handle sudden wealth.

1. Wesletter
July 2010 Vol. 2 No. 7 Investment and Planning Insights from Wesban
After the Storm
Severe market declines can scare investors into selling at
the worst possible time: when prices are at their lowest.
Sticking with your investment strategy through tough
times requires careful planning and discipline, but it is
more likely to pay off in the long run.
The image illustrates the average performance of stocks,
bonds, and a diversified portfolio during and after four
U.S. recessions. During recessions, stocks performed
the worst and bonds the best, while the diversified
portfolio offered a middle ground. However, after the
recessions and in the long run, stocks provided the
highest returns, followed by the diversified portfolio;
bonds did not measure up. There are two lessons here:
1) Since you cannot know for certain when the market
will bottom out, if you are invested, stay invested, and
2) Diversify in order to reduce downside risk.
About Wesban
The Wesban Team
wesban@wesban.com Wesban provides financial
205-995-7778 planning and conservative
investment management
designed to help families and
small businesses grow, protect,
and transfer wealth.

2. Wesban Financial Consultants, P.C. Investment and Planning Insights from Wesban July 2010 2
Handling Sudden Wealth
Before planning your long-term investment
strategy, make sure you've taken care of some
immediate needs. Establish an emergency fund
(make it three to six months' worth of expenses),
If you have suddenly come into a large sum of and if you've been carrying consumer debt like car
money, whether it’s a payout from an inheritance, loans or big credit-card balances, now's a great
the lottery, stock options, or a favorable verdict in time to pay it all off.
a lawsuit, there are some important steps that you
might want to take. Finally, consider how your windfall can serve you
for long-term goals such as paying for children's
First and foremost, try to keep your bearings about education and your retirement. The questions are
you. Don’t immediately quit your job; avoid any many. You might want to consult with a financial
temptations to spend most or all of it on frivolous planner, who can help you figure out all the
items. Be on the lookout for crooked financial complicated variables and options.
operators who make offers that seem too good to
be true, or friends and family who appear out of
the blue with loan requests and business proposals.
Don't feel that you have to invest your money right
away. There's nothing wrong with letting it sit in
the bank while you carefully consider your options.
No matter how you've obtained your windfall,
there will be tax consequences. It is highly
recommended that you consult with a tax lawyer
to make sure you follow the right steps.
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The Wesban Team Wesban Financial Consultants, Tel:205-995-7778 wesban@wesban.com
P.C.
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Birmingham, Alabama 35242