I recently had dinner with a friend of mine who is a lawyer in Philadelphia. Not surprisingly, the conversation turned to the economy. He told me that he had intended to buy a new car this year, but he was delaying it because of economic conditions. I asked him how his practice was doing and he told me that 2008 was his best year ever and that 2009 had begun even better. So why wait, I asked, particularly since car dealers are almost giving cars away. He didn't really have an answer, but I believe he is typical of how many people who haven't been directly affected by the economic situation are acting. All of the negativity they are hearing and reading is affecting their habits and that, of course, is in itself having a negative effect on the economy.

Unfortunately, none of us have the power to control what and how the media reports the events of each day. In addition to what our clients are experiencing in their portfolios, their angst is certainly being exacerbated by the doom and gloom they hear daily. Statements such as, "We are in another depression"; "The market will get much worse before it gets any better"; "This recession is likely to continue for very long time"; "The stock market may never recover for many years," are heard almost daily. While our clients have no power over what the markets do or what the media write, they do have control over how they react to all that negativity. We believe that a part of our responsibility as financial life planners is to help our clients get through this period emotionally.

One of things we did at our firm was hold several roundtable meetings to get feedback from our clients about how they were doing and what was bothering them the most, and to answer any questions they may have. We had no specific agenda; mostly we heard about how they were coping with the reduction in their portfolios and the negativity they were hearing daily. In addition, we pointed out to them that much of what they were hearing and reading was very exaggerated and positives were scarcely being reported.

We asked them if they knew when the bottom of the bear market had been. None of them raised their hands. At that point, the bottom had been on November 20, 2008, but none of them knew. So we asked how they may have felt on January 2, 2009, if the headlines in all the major papers throughout the country read "Market Significantly Recovers Since November 20." What if the story went on to say that from November 21 to December 31 the S&P was up 13.09%, the Russell 2000 was up 22.08%, the EAFE up 21.21% and REITs up 40.25%? Would that have made a difference in the way they felt? Almost all answered yes.

Of course, the markets have since closed below where they were on November 20 (in February as of the writing of this article). But the point remains that good news wasn't reported.

Another exaggeration was the report that the United States had lost 2.5 million jobs in 2008, the worst loss since 1945. Now we do not want to trivialize this significant decline. But in none of the stories we read was it pointed out that in 1945 the population of the United States was about 90 million people. In 2008, it was over 300 million and the equivalent job loss would have been 8.3 million jobs! Why wasn't the percentage of the population reported in the stories? Probably because it wasn't negative enough.

After one of the meetings, one of our clients suggested that we periodically send e-mails/letters to our clients in which we report either positive news or expose the exaggeration of some of the negatives. So we decided to do just that. Some of the e-mails we have sent or will send shortly are summarized:

Thanks to an article written by Dan Richards, an award-winning faculty member in the MBA program at the University of Toronto, we exposed the myths that investors made no money in the market from the mid-'60s to early '80s, that it took 25 years for the market to recover to the level it reached in 1929, and after inflation investors lost money for long periods of time. These are myths, of course, because none of these reports include dividends, which significantly change the results. The media ignore dividends simply because the story wouldn't be negative enough.

Some of our clients were concerned that the policies being formulated in Washington may be similar to what may have prolonged the Great Depression (large government spending), and that it took a war before the economy recovered. We have no idea what the effect of the spending was, and we certainly didn't want to participate in a political debate with our clients. But they needed to be reminded that it is the returns on their portfolios that concern them, and while the depression lasted many years, the markets reacted quite differently in many of those years. We thought we needed to point out that, in spite of what was happening in the economy, large company stocks performed quite differently. We cited data from Ibbotson that large company stocks performed as follows after the implementation of the New Deal: 1933, +53.99%; 1934, -1.44%; 1935, +47.67%; 1936, +33.92%; 1937, - 35.03%; 1938, +31.12%; and 1939, -0.41%.

In an effort to help our clients put current conditions in their proper perspective, we quoted Ben Stein from a column he wrote for The New York Times early in 2009: "We are more than our investments. We are more than the year-to-year changes in our net worth. We are what we do for charity. We are how we treat our family and friends. ... Losing and making money are not moral issues so long as you are being honest. You may have a lot less money as this year ends than you did two years ago. But you are just as good or bad a person as you were then. It is a myth that money determines who you are, and if you have gotten over that myth by now, then 2008 will have been a very good year."

Our COO, Jeff Weiand, reported that he had taken a call from an employment agency-one that was not trying to sell us its services. Instead, it was seeking our help. The agency has 5,000 positions nationwide to fill for Wells Fargo and several other companies. It needed workers and reached out to us with the hopes that if we knew of anyone needing or wanting work, we could send them its way. When Wells Fargo received TARP funds, it also had to lay off many people. Now there's a rush of mortgage loans and not enough people to service the applications, and the company is looking for mortgage assistants, loan processors, closers and underwriters. How many companies, we wonder, have laid off employees in haste and will soon need to increase their workforces?

All the media seems to want to report these days is that credit has ostensibly dried up during this recession and that banks simply aren't lending money. We know it is probably true for many of the large banks, but just this week I received two phone calls from clients who reported that they were moving their money to small community banks, ones that, in the words of those bankers, have "plenty of money to lend" and whose balance sheets are very sound. In both of these situations, our clients changed their banking relationships from large national institutions to smaller ones and their lines of credit were increased-something that the large banks refused to do. Perhaps one of the outcomes of the economic turmoil will be the re-emergence of community and regional banks that make sound business decisions and have not been caught up in the credit crisis many of the large banks are experiencing. We are told that these banks are too large to fail. Perhaps they are too large to succeed.

As I said previously, it is not our intention to trivialize what is happening. And we know that many people are suffering. However, most of our clients will still be able to achieve their lifetime goals. Some may need to make some adjustments, and we are here to help them do that. But agonizing about things over which they have no control and focusing on the negatives they hear will not help. In a small way, we want to put things into perspective for our clients and help them focus on living their lives. Oh, and by the way, we did our small part in helping the economy by convincing our lawyer friend to buy that car now.