The stock market always recovers.
Since 1926, the stock market, as measured by the Standard & Poor’s 500 index, has had 58 years of positive returns and only 24 years of negative returns.
Historical odds are 8-to-1 that the market will be down by 10 percent or more during any single year, and 2-to-1 that the market will be up by 10 percent or more in any given year.
Waddell & Reed Regional Vice President Monica Lawfield discussed financial strategies during a recent wine tasting at the El Paso Club hosted by financial adviser Denise A. DeLeo.
“On March 9, the market hit a low point, and it’s started to go up since then – a 35 percent increase,” Lawfield said. “It’s amazing how quickly this happens. Going back to the ’50s, we’ve had about 11 recessions – so we’ve done this before. But the market starts going up while the recession is still happening. While we’re consumed with job losses, the market sneaks up in the middle of the night on us.”
This is the time, she said, to step off the battlefield and take a look at your financial plan – not only investments, but long-term care needs, estate planning and tax planning.
“But be mindful of risk – the domestic market might not be the first to come back. It may, but it may not,” Lawfield said. “I’m a patriot – I want my country to be No. 1, but I’m also a capitalist. I’m going to look for opportunity wherever I can find it.”
And in the long-term approach to investing, future dollars depend on tomorrow’s price – not today’s.
“This is a good time to buy, and allow the stock market to come through this cycle and go forward,” she said.
‘Bridging the Confidence Gap’ with clients
At a recent Colorado Springs Technology Incubator seminar, Bernard Sandoval, president and owner of Sandia, a marketing and design firm, discussed marketing a business during economic downturns.
“One of the marketing blunders during a recession is doing nothing – waiting, hoping, praying that something turns around, or putting money into the wrong place,” he said.
But until the confidence gap between a business and its clients is closed, that message will be difficult to communicate.
The way to capitalize in a down economy, Sandoval said, is to follow up on the promise you’re making with your product, Web site or service.
“If you don’t follow up on your promise, your prospects tend to stop listening to you,” Sandoval said.
And, business owners need to stay visible by being involved in the community, volunteering and teaching seminars.
“Do everything you can to get your name out there,” he said. “It will help you when the economy starts to turn around.”
Meanwhile, this is an opportune time to solidify your message and tailor it to your audience.
Does your product or service need emotional appeal (think resort community), or does it need lots of numbers and data (think information technology)?
And use this lull time to make your Web site into what it should be.
“Your Web site is huge – it’s like having hundreds or thousands of salespeople,” Sandoval said. “Rob Slee, author of ‘Midas Marketing,’ says we’re moving from a push strategy to a pull strategy. And the Web site is a pull strategy.”
Think of what you do before buying something. You visit the Web site, check out the product and read the testimonials to see if it’s legitimate. Well, your customers and potential customers do the same thing.
“Your Web site may be your only shot at reaching them,” Sandoval said. “So put as much relevant information as possible on your site.”
So, you redesigned your Web site with pertinent, easily accessible information … now what?
Of course, you can buy positions, such as pay-per-click, with Google, Yahoo and other search engines, he said.
But that’s not all that’s needed.
“Make sure that for every few dollars you spend, you bring in people,” Sandoval said.
Words that are too broad for your audience won’t convert to higher traffic to your site. The key words have to be search engine optimization friendly, and it’s important to track whether these words draw traffic to your site.
One local company, with $100,000 in revenue per month, spends $30,000 to $40,000 per month on drawing Web traffic – because that’s where all their business comes from.
“I guarantee you that they’re camped out on their Web site to see which words work and which don’t,” Sandoval said. “HTML is the name of the game – having the right key word, the right key phrases, and industry relevant links to your Web site.”
And for organic (not paid for) search engine optimization, the key is having the correct H1 (home page) headline.
“It not only has to resonate with the human being (who is searching), but also with the search engine spiders,” Sandoval said.
Most importantly, remember that the market is today, tomorrow and next year.
“Start a dialog with your potential customers,” Sandoval said. “Only 1 to 5 percent are ready to buy right now. The rest are future buyers. They’re doing research, or just entering the market, or willing to switch vendors or becoming aware of a need – nurture them.”
Rebecca Tonn covers banking and finance for the Colorado Springs Business Journal.