Pat and Peter Daquila have a new daughter.  Alexandra Nicole was born on August 11^th.  She weighed in at 7 lbs. 11 oz. and was 20 inches long.  She joins her brother and sister, Nicholas and Christina.

Diahann delivered a keynote speech titled “Staying ahead of the Financial Services Revolution” a few weeks ago in Tallahassee, as part of Florida State University’s Bruning Distinguished Speaker Series.  She also spent the day speaking to students and faculty about the future of financial services.  Diahann received her BS in Management from FSU and her MBA from the University of North Florida.

LWA has volunteered to provide financial planning services to families of victims of the September 11^th terrorist attacks through programs established by the Financial Planning Association and the CFP Board of Standards.  If you know of someone who needs assistance, please let them know about these services.

Diahann will appear next on CNBC’s “ Make Your Money Work” segment of Power Lunch on 10/30, 11/20 and 12/6. 

By Diahann W. Lassus, CFP^®, CPA

As we get closer to the end of 2001 and look toward 2002, we begin to think about the recent past and look forward to the future.  We think about those we have lost and the fears that we face as a result of the September 11^th  attack.  We go forward recognizing that our democracy and the freedom that we have in America are priceless to each of us.  We go forward knowing that we are a warm and caring people with an incredibly resilient strength of character. 

As a country, we will do what we must and as a people, we will pull together to support one another as we work our way through the many issues we must confront along the way.  

We will remember the victims and the heroes.  We will be more vigilant, more aware, and more appreciative of the life we have.  Stay safe and call us when you need us.

By Gigi Collins, CFA

On September 11^th the world changed.  There is more uncertainty than ever.  Many of us may be feeling like we need to make a move to more conservative investments.  Therefore, this is the time to take an historical look at the stock market with a definite focus on the future and our long-term investment strategy.  Remember that time is on your side with the stock market. 

No one knows where the stock market will be next year, but history shows us that in the years immediately following such an event, it was significantly higher. The important lesson is not to try and time investment purchases and sales.  History has shown that investors who sold stocks based on a specific event such as a declaration of war usually paid a steep price down the line. 

According to market strategists at various  brokerage firms, here's how the stock market has reacted to previous crises.  In each case, after the plummet the road to recovery began.

1906: Earthquake in San Francisco caused a break of about 12 percent in the Dow over a period of about three weeks.

1914: World War I started, pitting Germany and Austria-Hungary (the Central Powers) against Britain, France and Russia. On July 31, the New York Stock Exchange closed for the first time since 1873 and did not resume trading until Dec. 15. It reopened about 3 points higher.

1917: From the day the United States entered World War I in April to year's end, the market declined by about 35 percent.

1939: When Britain and France announced they would defend Poland in March, the Dow dropped about 20 percent over a month.

1940: The blitzkrieg in the spring caused a 25 percent drop over a period of two weeks.

1941: Pearl Harbor. The Dow was at approximately 117 in December 1941. It fell to 93 by early May 1942--a 20 percent drop. It then rallied to 145 by July 1943, Bloch said.

1950: After the Korean War began in June, the market dropped 13 percent in a month.

1956: The Israelis, British and French invaded Egypt after it seized the Suez Canal. The Dow lost 10 percent during the four-month period.

1962: In August, when the markets endured the Cuban missile crisis, the Dow was at 615. It fell to 550 in October and rose to 650 in December and 767 by December 1963. The impact to the markets was minimal.

1963: On Nov. 22, President John F. Kennedy was assassinated and the markets fell 20 points in 20 minutes before being shut down. When the markets reopened under Lyndon B. Johnson, the Dow went from 712 in November to 825 by April 1964 and 891 by November 1964.

1974: The United States was in the midst of a bear market when OPEC instituted an oil embargo. Over the next nine months the Standard & Poor's 500 dropped a further 40 percent.

There have been nine recessions since World War II, and we have made it through all of them.  When the recession hits bottom, the stock market looks forward.  This is why it is important to stay invested during this time.  It is really impossible to predict when the market hits bottom and invest at the “exact” time before it begins its upward movement.  It is more prudent to make sure that you have a diversified portfolio to begin with and then remain patient.  Diversification is the best defense in these difficult times.  It will not eliminate losses, but it will reduce them and it keeps you ready for when the market turns around. 

During the Persian Gulf War in 1991, investors thought that the war would pull down the market and oil would go up.  However, the bad news had already been priced into the market, and once the war started, the market actually shot up.  This demonstrates that you can never predict what the market will do in the short term.  Having a diversified portfolio allows you to experience both the up side and the down side in moderation.

The most important thing to remember is that nobody knows how investors and the markets will respond in the short term, but in the long term the financial markets are driven not by emotion or reactions but rather by fundamental economic conditions.

This down market cycle will pass, as every one in the past has, and it will lead to the next bull market.