Dear Clients and friends of the firm,

I'm sure by now you have seen the news and are wondering what happened yesterday. Two major events occurred on the same day and impacted the markets dramatically. This may spark the obvious question: What do I do now? (Or maybe: What are you, Merit Wealth Management, doing with my accounts?)

As it relates to what is occurring in Europe: The question is not whether things are bad in some weaker members of the European Union, or even whether things will get worse. That may seem to be certain. The correct question is whether things will get even worse than the market expects them to get, or whether they will get worse than where we are today, but not quite as bad as the market anticipates. This is what makes the question very difficult to answer and why we don't attempt to time the market. Yesterday was an indication that the markets are uneasy with what is occurring, but news of Germany approving its portion of the bailout for Greece has already been met with positive reaction as European markets trimmed their losses today.

The plunge of the Dow: News coming out last night and into this morning from USA Today and MSN.com is that a Citigroup futures trader was placing a trade for $16,000,000 of Proctor and Gamble futures and instead placed a trade for $16,000,000,000 (that is million to billion). If, in fact, this “fat finger” trade occurred, it very easily explains why P&G dropped about 40 percent in a moment’s notice, only to rebound to close down 2.3 percent by day’s end. This precipitated the supposed 1,000 point drop in the Dow. The trade error, if you will, only exacerbated the already sour news on Europe.

Just as we stayed the course during the recession, we continued to stay disciplined and rebalanced over the past 12 months. Now is certainly not the time to begin speculating on where the market may go. An Investment Policy Statement helps maintain discipline during good times and also during tough and very turbulent times.

If I have learned anything over the past three years, it is that "the experts" cannot predict any better than you or I about where the markets will go. I know it is tough to watch, especially since markets have been doing well the past 12 months, but I don't have a clear crystal ball to predict what may happen next.

I will continue to monitor your portfolio and make sure that we remain in balance — whether that means we buy more equities in a down market or sell equities in an up market.

Thank you,

Jeff Griswold

Merit Wealth Management, LLC