Partners - Winter 2008 - (Page 7)

cover story At this time last year, did you: Suppose subprime lenders would go bankrupt? Expect Wall Street to become so keen on going green? Think Southern California would be hard hit by wildfires? If you answered “yes” to all of those, how did you know? m aking predictions for the new year, and evaluating trends for the past year, is a prevalent hobby. Hundreds of people make their living as trend spotters, trend analysts and futurists. They read a lot, analyze data, watch hours of broadcasts and listen to friends. Then, they simply try to make sense of it all. “We call it connecting the dots,” says Joyce Gioia, president of the Herman Group, a Greensboro, N.C.-based trend tracker. “We see things going on in different realms, look at the implications and what it means for the future.” But even with significant data and analysis, can anyone really see into the future? And if so, how much stock should we put into these predictions? Perhaps this is why, even though subprime lenders have gone bankrupt and there’s good reason for concern in the housing market, it has not been the devastation many predicted. On the other hand, maybe it still could be — and what will this mean to you? Those who predicted the dot-com tech bubble burst had good cause to say, “I told you so.” But when you look back on that so-called shattered economy, the jobless rate never entered double digits (unlike the 25 percent it reached in the Great Depression), the gross domestic product still grew, and many people saw little or no effect on their lives. Top 10 Reasons to Have a Happy New Year 10. Since 1996, national crime rates have declined more than 26 percent and many cities are at all-time lows, according to the Bureau of Justice Statistics. 9. Scientists have figured out how to make a car run on air. 8. Harvard researchers say coffee is now good for you. 7. Your credit union has money to lend and you’re a member. 6. “Harry Potter and the Half-Blood Prince” is scheduled to be released in theaters later this year. 5. Cocoa could become the next “miracle drug” — or at least a vital food supplement, according to the World Future Society. 4. Capital gains taxes are low, and your credit union has financial advisors. 3. Financial losses can be tax assets, and your credit union can refer you to financial consultants. 2. Emerging green companies can turn food, paper, plastic and other trash into fuel. 1. The price of toys will probably go up, which could mean your (grand)kids will learn to understand the concept of “less is more.” Or at least you might have less clutter. Proactive, Not Reactive As anthropologist Margaret Mead once said, “We are our culture.” In other words, fads exist and predictions often come true because, quite simply, we observe and dwell on them. The takeaway, then, is that individuals still have control over their choices, and those choices are what define our lives, more so than any trend. Trends and predictions should factor into your decision making, but ultimately, you’re the one who makes the choice. You should know more about your lender than just the fact that they’re willing to lend you money. And most reputable financial institutions want to know more about you than just your FICO score or social security number, especially for a large purchase like a home. So this year, you might be able to predict with pretty good certainty that we will elect a new president, health care will continue to be a hot topic and tax codes will change. But, more important than the predictions themselves, what decisions will you make with that information? Feeling Fine Kathy Ruzeicki, a credit union member, says she follows her grandmother’s advice when it comes to making sense of trends and predictions. “Don’t get caught up in all of those up and down news reports,” Ruzeicki recalls her grandmother, Elsie Sperber, saying. “She used to remind us, ‘Your house is an expense, not an investment. You buy the house because you want to live there.’” “My grandma lived through the Depression, both world wars, the baby boom and bust, and still told us to take this practical view,” Ruzeicki says. For someone like Ruzeicki, the 1987 stock market crash could have been devastating, but her grandmother knew it was just a blip on the radar, just a short-term setback. The stock market has generally proven to be a very wise investing plan. “When painful times do come and things don’t go as planned, my grandma’s example has really helped me let go and move forward.” WINTER 08 7

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Partners - Winter 2008 Contents Member News What's Next? Motley Fool: A Tale of Two Borrowers Jean Chatzky: Extreme Jobs Investment Corner On Your Side Member Education

Partners - Winter 2008

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