I don’t know about you, but I am excited about the New Year. After the worst year in the stock market since 1931, things can only get better – I hope. We’ve spent a lot of time looking back at the history making events of the year. Pages and pages from authors all over will be added to our thoughts on the previous year. But now it is time to look forward, hopefully with more wisdom from the battle scars of 2008. We would like to identify some these that we think will come up time and time again in 2009.

Debt Destruction. This is a fancy way of saying that people will have less debt at the end of the year than they do at the beginning. For some, it will be because they got wise and decided to be proactive in their financial lives. For others, it will be forced upon them by bankruptcy or foreclosure. Debt will be harder to obtain in 2009 for corporations and individuals alike.

Continuing Energy Independence. Don’t let the ease in oil prices fool you. I fear these low prices are not here to stay. Sure, they will be much lower than the insane highs of last summer, but once global demand resumes, the demand will push prices up from current levels. But regardless of what happens to the price of oil, the quest for alternative energy will be in full swing. It is finally cool to be “green”, so not only will it make financial sense in the future, but the culture will encourage it.

More regulation. For all of you free market fans out there, this is not a welcome development. With all the failures of existing regulatory authorities in 2008, we will see an overhaul of the system. You’ll see new leaders, consolidation of existing regulators, and creation of new ones. Humans have the tendency to overreact in both directions. So just as we were too lax in certain areas we will certainly begin to be too strict in others going forward.

Better news. With the history making failures of 2008, it won’t take much to feel like we’ve made progress in 2009. News will likely get worse as more layoffs and bankruptcies increase in the first half of the year. But at some point in 2009, we will run out of bad news or we will become so calloused to it that anything that is not tragic will seem like good news. I think that we will all feel better about life and finances in December of 2009. But one caveat, I’m an optimist.

New Paradigms. Another word for a paradigm is a “framework” through which we live and think. The catchword of 2009 will carry over from the election – “Change.” Some of the frameworks that we process information in will be forever changed. Our communication framework is one that continues to evolve. Whereas the “Greatest Generation” is a generation of few words, the “Millennial Generation” is a generation of many words - but instead of communicating in paragraphs, this generation uses short sentences (or even fragments of sentences). Look for the age of efficiency to continue having far reaching implications on our communication paradigm. This evolution even has an effect on this newsletter. How you may ask? If it were longer than one page, you probably wouldn’t read it. How well do I know you?

Chad P. Wilson, CFP

Foundation Bank – a division of McKenzie Banking Company - 731-554-2423