Manarin Investment Counsel, Ltd.

I have a secret plan to destroy America.  If you believe, as many do, that America is too smug, too white bread, too self-satisfied, too rich, let's destroy America.  It's is not that hard to do.  History shows that nations are more fragile than their citizens think.  No nation in history has survived the ravages of time.  Arnold Toynbee observed that all great civilizations rise and they all fall, and that "an autopsy of history would show that all great nations commit suicide."

That's the introduction of this speech given by former Colorado Governor Richard Lamm that raises some poignant thoughts on multiculturalism in the United States.

---

May 6th was a brutal day on Wall Street. It was brutal because the plunge on the Dow we witnessed appears to have been caused by a trading glitch that set off a wave of additional trades accelerating the decline.

Another factor in addition to the actions of financial engineers and traders that caused both individual and professional investors to sell was emotions. What can I say? Years of evidence show that those who have the courage to maintain a calm approach to chaotic events can come through any upheaval in fine shape.

We've been talking about a potential market correction several weeks now on the radio show but the bottom line is that a firm commitment to common sense and discipline is vital in today's financial environment. Those blindsided by emotions will go broke.

This is monumentally important to investors.

If you can, take advantage of the bargains while keeping your psychological seat belt fastened. These are interesting times we're living in but that doesn't mean it should be tough for everyone. For the highly aware, it's a golden opportunity.

---

From Roland: With all the scary news on the debt crisis of Greece and others, I hope this will help you better understand the real issues versus the media hype.

First Trust - Problems in Europe right now are serious, especially if you live there and even more so if you work for the government. Greece has basically defaulted, and there are riots in the streets. Spain and Portugal could be next. Global equities markets are selling off. Is this the "W" all those pessimists have been waiting for? No one knows for sure.

But one thing we do know is that the world has experienced many defaults before. The Asian financial crisis in 1998 was serious of course, but we believe a better comparison is the Latin American debt crisis of the early 1980s.

Look at the table above.

Just about every major country in the hemisphere (other than the U.S. and Canada) defaulted on its debt. What is interesting to note is that the market was up significantly in almost every year of defaults. Most importantly, the US had significant exposure to these loans, in fact, the 8 largest banks had 263% of their capital lent to Latin American countries.

Today the situation is different. As far as we know, no US financial institution has any kind of significant exposure to Greece or any other European country and the US is in a V-shaped recovery. If the Latin American debt crisis can be our guide, current fears are overblown and the market has (or will) create a great new entry point.

There will probably be some more bad news in the weeks ahead, but these problems will likely blow over as the US economy continues to strengthen. We remain convinced that another leg down for the economy is unlikely at this juncture.

---

"If broke people are making fun of your financial plan, you're on track." - Dave Ramsey

People have different views on tax refunds.  On one hand some will say that by receiving a refund you overpaid the government this year and you should have given them less of your money.  And there are those who view a tax refund as a special windfall.

If you do receive a refund this year we hope you put it to good use with a little financial common sense.  Afterall, you did work for this money - it came out of your paycheck, so why not make it work hard for you?

Some quick ideas:

Restock Your Emergency Fund An economic downturn can be much less painful if a few months of expenses are stashed away on the side and readily available.   How much is enough?  Whatever gives you the most peace of mind.

Reduce Any Bad Debt To us a mortgage or a student loan is still debt but they're not always bad debt since the home value has an opportunity to appreciate and a student loan will hopefully provide more earning potential.  Any other high interest consumer debt should be aggressively paid down.

Invest in Your Future Have you addressed the first two points?  Great, then consider taking the funds from your refund and investing in a retirement account.  Each of us is responsible for funding our own retirement so anything that you can save away today will grow over time and pay off later on.

If you do have funds left over from your tax refund to invest, our vote is to be an owner if it is money you know you won't touch for 10+ years.  Common stocks have historically given investors the highest rate of return over the long run but our word of caution is always diversify, diversify, diversify.

Here is the investment model that we often recommend.

---