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A Paper Roses Year

By Dian Vujovich

Only one more trading day left in 2008 and for some that’s more than enough.
But what a whopper of a year this has been.

Like every other year before it, and in those to come, there are some who have had a financially successful year while others have not.

For the happy campers— they’re the ones who still have their jobs; a roof over their heads; had their salaries increase and/or their combined household incomes go up; got a bonus; still have savings accounts with money in them; little or no debt; were on the receiving end of a bailout; had no exposure to the equity markets; weren’t part of any bogus investment schemes; have first-class health insurance; enjoyed good health; didn’t have a brush with the law, the IRS or the Feds; and little household strife—2008 has truly been a bountiful year.

On the other hand, anyone who hasn’t been as lucky and happens to be one of the millions of investors who have not liquidated any of their equity holdings and owns stocks or stock mutual funds in their personal or retirement accounts, well, they now know the pain associated with what may be substantial paper losses.

For who knows what reason, “paper losses” reminded me of the old 1960s Anita Bryant hit song “Paper Roses”. If you remember the song you’ll probably be able to sing the chorus:

“Paper roses, paper roses
Oh, how real those roses seemed to be
But they’re only imitation
Like your imitation love for me”

Just for the heck of it, I’ve taken the liberty of changing a few of the words in that chorus hoping my new version would make some investing lesson sense. The new lyrics aimed at anyone who has ever had a love affair with a particular stock, thinks that they have a Midas touch when it came to investing and won’t ever loose a dime in the market because they are special. My chorus goes like this:

“Paper losses, paper losses
Oh, how real those losses are to me
But they’re only limitations
Like some imitation loves can be”

The lessons: Losses once realized can be carried forward. Account values can grow over time. Markets don’t have emotions but the people investing in them sure do. So, when investing let your head not your heart be your guide.

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