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Jerry Citarella: It’s ‘a wait till your father gets home’ economy

Financial Truth

Posted: March 27, 2012 1:55 a.m.
Updated: March 27, 2012 1:55 a.m.

It’s been many years, but I still can remember one of the most unnerving statements ever.

When most of us were children, there was something our mothers would say when we did something wrong. It led to hours of horrible anticipation.

She didn’t say it all the time, but when she did — oh, was it serious. When things were really bad, my mom would say, (say it with me): “Wait ‘til your father gets home!”

These words had more power than most. They alone could destroy an entire afternoon, creating fear in children who felt otherwise invincible. Do you remember what would happen when your father actually got home? Would it be horrible or just a bit uncomfortable? The longer I had to wait, the worse I felt and the more scenarios were created in my mind. I couldn’t decide if I wanted him to get home to get it over with, or never come home to avoid it completely.

Here’s the real question. What was worse, the waiting or when Dad actually arrived? Usually the waiting was much worse. When my father arrived home, he was usually a lot calmer than expected. If he was truly upset and punished me, at least it was over. At least I knew the end result. I dealt with the circumstances, survived them and moved on. Likely, the stress and confusion of the unknown was ultimately worse than the actual consequence.

I believe this example helps illustrate our current economic condition.

I feel like we all know we’re in some kind of trouble. What’s going to collapse or cause our next wave of despair? Will it be Europe or, more specifically, Greece? Could unemployment stay at high rates or get even worse? Will our housing market falter again and cause general uncertainty? Who will be our next president and will this person be able to create stability? How are we, as a country, going to deal with our debt problems? Are we going to be able to do so at all? Will our credit rating actually be downgraded this year?

Question after question. We don’t know what’s going to happen.

I have to say that we, as a country, as individuals and as a world have made some mistakes, and now, we’re waiting for our proverbial dad to get home.

What will ultimately happen? Will it be horrible or will it be less devastating than what we might imagine?

The bad news: nobody really knows.

What we do know is that “dad will come home.” We’ll get our answers and will have to deal with whatever consequences come with them.

Just as children’s moods would change as they wait, the mood of the financial markets changes also, creating volatility. Recently, we’ve seen more market volatility than maybe ever before in history.

Looking around, is the volatility because things are bad or is it because we don’t yet know how this story ends?

I believe it’s both -- mostly because of the uncertainty.

There is some good news, however: once we eventually know the answers, we’ll know how to deal with them. It might not be easy.

At least we’ll know what we’re dealing with. But when will dad be home already?

Typically, things work in cycles and are somewhat predictable.

Not this time.

We have some unique scenarios and many presenting themselves at once. We also have government intervention at a level higher than ever before.

Would it have been better if the problems were left to sort themselves out? I don’t think anyone knows for sure.

Again, the questions need to be asked: “How does this story end?” What will happen when dad finally gets home and delivers our punishment?

I think we’ll be okay, but it’ll take some effort. I also know there are a lot of great companies that have been forced to downsize and have acted conservatively; keeping more cash on hand. Could this be good for profits and the markets overall when things do sort themselves out? We’ll have to wait and see. I think there’s a bright light at the end of this long tunnel. What will you do in the meantime?

Jerry Citarella is the owner of Infinity Wealth Management 23734 Valencia Blvd., Suite 301, Valencia, (661) 255-9555, ext. 11.  He is also the author of The Truth Helps Series of financial planning books. Citarella’s column reflects his own views and not necessarily those of The Signal. Submit questions to:  Securities and investment advisory services offered through NEXT Financial Group, Inc. Member FINRA/SIPC.  Infinity Wealth Management is not an affiliate of NEXT Financial Group, Inc.


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