All that in TWO weeks!

It used to be that July and August was a safe time to take some time off from work – that was until a series of bad summers occurred. Still, when else can you stay close to home and enjoy some of the world’s best beaches? When I left for vacation on July 31st, I did not expect that the summer doldrums would infiltrate the volatile investment landscape of 2008, but I was still a little surprised with the number of big stories that did break. Given the breadth and impact of the news, I thought it might make sense to extrapolate lessons for investors from the headlines – indeed; there was ample material from which to draw over the past fourteen days.

The ho-hum build up to the Olympics morphed into a frenzy of excitement, starting with the breathtaking opening ceremony (loved the fireworks!); continuing with the amazing 23-year old Michael Phelps winning eight gold medals; and of course an opportunity to laugh at our friends up north in Canada, whose uniforms spurred numerous outbursts of “yuck!” Even the most jaded could not help but get caught up in the wonder of the world’s athletes - investors should take note of the discipline, determination and planning necessary for each success story.

Russia’s invasion of Georgia was the antithesis of the Olympic spirit, but considering that I had read “War and Peace” over vacation (yes, all 1215 pages of the new translation!), I was steeped in the Russian spirit and could understand how bitter divisions could escalate into a larger conflict. As I read about the Russian march into Georgia, there seemed to be a uniform criticism of the world’s leaders, who missed a variety of signals leading up to the conflict. The take-away on this one is important: investors need to prepare for a variety of outcomes, even those that they really do not want to occur. By doing so, there is a chance to limit downside problems and perhaps the ability to find a good opportunity while others are in full-blown panic mode.

Now on to some of the financial headlines, the biggest of which is that commodity prices collapsed in my absence. Part of the plunge was attributed to the strengthening US dollar and weakening global demand, but a good bit of the action has been caused by the unwinding of a speculative fervor that gripped investors over the past three years. Although I own commodities on behalf of our clients as a long-term hedge, there is no way to interpret the pull-back as anything but good for the overall health of the global economy and the markets, as inflationary fears recede. Investors should take note that when price action is extreme on the upside; it stands to reason that the regression back to the norm will be equally as violent.

Finally, as we mark the one-year anniversary of the credit crisis, journalists continue to reflect on how the financial system got to a place of near-collapse. Investors should draw comfort by the uniform explanation offered by the pundits: when returns are pursued regardless of the risks involved, nothing good is likely to occur. In the end, this crisis can be boiled down to the same ol’ culprits that investors encounter every day: greed and fear. As the pendulum swings from greed to fear, the system has a tough time operating effectively. But this crisis will pass, just not as quickly as any of us would like.