Wednesday, March 04, 2009

Guest Blogger Wendy Kirkland: The Sky is Falling! The Sky is Falling! Or Maybe it Isn’t.

Recently my husband suggested taking a weekend off and heading to Hilton Head Island to celebrate my birthday and the upcoming release of OPTION TRADING IN YOUR SPARE TIME: A GUIDE TO FINANCIAL INDEPENDENCE FOR WOMEN. Virginia and I also had just seen our cover design, and that made our vision of the book sitting on actual bookshelves come alive.
So, off to Hilton Head Island. The name alone conjures up thoughts of salt air, thundering ocean waves, sea oats fluttering in the breeze, sandpipers and pelicans, and more than anything else, wealth. Like its cousins Palm Beach and Palm Springs, the island’s homes tend to bypass the hundreds of thousands and head straight to the millions. In fact, one home advertised a “reduced price sale,” a steal at $25 million!
Jack and I planned to wander around town, stopping in a few shops, checking out restaurants, relax and read, and most of all doing some serious people watching. I probably should have expected signs of change, but what we saw still took me by surprise. Even this “uber wealthy” town was feeling the pinch of the recession. Remember, a few celebrities and well-known writers call this island home, and entry into this elite society starts with the purchase of one of these lavish homes.
In the motel lobby, I gathered up a free area guide targeted to tourists and a local newspaper so we could plan our day around our lunch destination. The first restaurant on my list, closed (obviously recently, since it was listed in a fairly up-to-date guide). Okay, not to worry, I had a few back-ups. The second restaurant was closed as well and looked as if it had been some time since its grill had been fired up. My third try was open and doing business (but in hindsight getting a table was way too easy right at the peak of the lunch rush.)
Even then, it wasn’t until we began touring the town of Hilton Head Island that the recession really hit me. Every store had bright red “Sale” tags everywhere. I commented to Jack that the person producing red tags apparently had the most successful business around. When we went into one our favorite haunts, a locally owned bookstore, we were the only shoppers. I spoke to the owner, and he candidly said that most days it didn’t pay to turn on the lights. But a visit to the Courtyard Book Exchange and the local library assured me that people were still reading, they were just finding more economical ways to satisfy their need. (Historically, library usage spikes during economic downturns.)
I knew times were tough, in terms of the financial markets and unemployment, but I was surprised by the impact on even the wealthiest areas. Perhaps the uneasiness so many feel is rooted in the knowledge that even the very well off have seen their assets shrink so rapidly.
Given the bleak picture I took away from Hilton Head Island, I had to wonder if this was the best time to release a book about opportunities in the stock market. But my concerns passed quickly. Option Trading in Your Spare Time: A Guide to Financial Independence for Women, delves into the principles of the stock market, one of which is that the overall market and its individual sectors such as transportation, gas and oil, agriculture, consumer staples, and so forth, move in cyclical patterns. We see ebb and flow, hills and valleys; when one business hits a downward trend another rises to benefit by the monetary influx. Investment monies stay in motion, flowing from one asset to another. If it flows out of gas and oil refining, it might flow into gold and silver or some other precious metal. Funds withdrawn from the computer software industry might flow into medical or insurance businesses.
While the publishing business faces a rough patch, too, it also will rise as money cycles back into that industry and some other business sector cycles out of favor. Remember, too, that the publishing industry (including bookstores and most recently the newspaper sector) is going through shifts due to rapid growth of information technology. But while bookstore sales might fluctuate and they create new strategies to maintain market share, book sales and promotion on the Web continue to increase. In other words, people are still reading and demanding information, but the methods we use to reach our customers will continue to change. Virginia, who has been a fulltime writer and hence, involved in the publishing industry for over 25 years, has seen a few of these cycles over the years. As she likes to say, the demise of the book—and the reader—has been greatly exaggerated.
Virginia and I discovered that though some aspects of the publishing industry were being affected by economic trends, other sections like our literary agency, the Knight Agency ended the year 2008 up by 50%. Other agents have reported increased sales of clients’ books in January.
Virginia’s sensible viewpoint reminded me that often times these business cycles bring about change and growth in new directions. For example, many new small businesses are launched during these cycles of economic stress. An old analogy fits here. When we prune a tree, it becomes stronger and healthier because the dead wood and unwieldy branches have been trimmed away. The base of the tree remains strong and the branches produce more blossoms and juicier fruit.
Economic downtrends tend to be fast and furious (and compared to up-trends they don’t last very long), and then the stock market’s usual modus operandi is to test these lows by dropping several times to that level. If the bottom holds, it will begin a new gradual (but steady) uptrend that can last for years before breaking downward again. Within the next few months and into the summer, these levels will be challenged and a positive move upwards will be initiated. This is the perfect time to take advantage of the opportunities bargain basement stock prices offer and the perfect time for our book to come out to teach women traders how to take advantage of the inevitable stock price increase.
The stock market is an early indicator that points the way ahead of economic growth. This upswing will benefit authors who address changing issues of our time, or who satisfy readers’ desires for entertainment and escape. New releases will reach bookshelves in time to meet the demands of devoted readers during the coming months.
Wendy Kirkland and Virginia McCullough are co-authors of the upcoming release OPTION TRADING IN YOUR SPARE TIME: A GUIDE TO FINANCIAL INDEPENDENCE FOR WOMEN (Sourcebook, May 2009). Click here to pre-order!

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