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Have you heard about the latest corporate takeover? FedEx is expected to join its competitor UPS, and become FedUP!

There haven’t been too many laughs on Wall Street lately, so please excuse my attempt to promote a little laughter. Be advised that the above statement is purely fictitious, for your amusement only.

Let’s review why you may be feeling a bit fed up.

On Sept. 7, the U.S. government seized Fannie Mae and Freddie Mac. The Federal Housing Finance Agency (FHFA) assumed direct responsibility of them. Together they provide funding for roughly 75 percent of new home mortgages. The FHFA took control because it was determined that Fannie and Freddie didn’t have enough capital to survive impending losses. Since the beginning of 2007, Fannie and Freddie have lost a combined $10.6 billion.

While unfortunate, the government’s move was, I believe, necessary to protect the financial system and support the delicate mortgage market. We cannot draw conclusions about other lenders based on what occurred with Fannie and Freddie; they’re very different from other financial institutions.

U.S. Treasury Secretary Paulsen stated, “today’s action should accelerate stabilization in the housing market, ultimately benefiting financial institutions.”

Then, on Sept. 15, Lehman Brothers declared bankruptcy and Merrill Lynch is being purchased by Bank of America for approximately $50 billion or $29 a share. It’s tragic for the industry to lose two major Wall Street firms, but both are examples of what can happen when risk management controls aren’t properly utilized.

How will this affect you? Credit won’t flow as easily or as cheaply as it has. Many consumers relied on funds derived from their homes and spent freely, and the economy grew. The growth was driven by consumers rather than by production or wage increases.

Money flew out of our pocket books and went into the hands of others, who now have a new found purchasing power. Every day, 213 million people worldwide move into middle class status and bring a healthy demand for market resources.

In the 1980s, the average U.S. household had debt in the amount of 80 percent of their income. Today, it’s 120 percent of household income on average. A survey by careerbuilder.com, said 21 percent of people earning $100,000 or more, live paycheck to paycheck, and 10 percent of that group say they save $0 each month. You don’t need me to tell you how the story ends.

Women tend to invest more conservatively than men. While “conservative” investments may prove attractive in these volatile times, a totally conservative investment strategy may hinder you from reaching your long-term financial goals because of inflation.

Certain low-risk investments such as certificates of deposit are safer than cash under the mattress, and you’ll at least receive a greater return than if you’d put your assets in a safe deposit box. But forget about substantial financial gains, which could turn out to be important in times like these. Inflation was measured at 4.3 percent since the end of June as measured from June 2007.

It may be tempting to be invested so as to barely notice the turbulence. An Ibbotson Associates study of average annual returns during the 20-year period from 1986 through 2005, showed more conservative investments such as Treasury Bills returned 4.74 percent; U.S. stocks, 11.93 percent; international stocks, 10 percent; real estate, 9.88 percent; international bonds, 8.74 percent; U.S. bonds, 7.93 percent.

Although such figures illustrate past performance that doesn’t indicate future performance, the message is clear: over time, more substantial gains have come from diversified investments.

Stronger growth would’ve occurred if you’d stayed invested in stocks and bonds. That would’ve meant riding through the market crash in October 1987, the Asian financial crisis of 1997, the dot-com bubble burst in March 2000 and the recessions of 1990 to 1991 and 2001 to 2003. These were all temporarily scary times, but portfolios of U.S. or international stocks would’ve gained more than 10 percent annually, far outpacing inflation and building a potentially substantial portfolio for retirement or to meet your other goals.

Financial success depends on defeating inflation. Conservative, low-risk portfolios may succeed in keeping pace with inflation, allowing you to afford to buy today’s basket of groceries at its cost 20 years from now. If just keeping up is your purpose, low risk investments might possibly do the trick. But if you have loftier goals, a totally low-risk portfolio is unlikely to produce what you want.

Studies have shown that well-diversified portfolios — carefully chosen mixes of risky and less risky investments — have helped reduce volatility while delivering decent performance on the long term. Ibbotson’s 20-year study showed a well-diversified portfolio returning an average annual return of 9.46 percent. That’s the kind of return that can help propel your portfolio toward its goal.

The performance mentioned does not include transaction costs, which would reduce an investor’s return. Treasury bills are guaranteed by the full faith and credit of the United States Government as to the timely payment of principal and interest. The principal and returns of stocks are not guaranteed and will fluctuate in value. International stocks and bonds are subject to additional risks such as currency fluctuations, differing accounting standards by country, and possible political and economic risks. Real estate values will fluctuate and are subject to economic risks. Bond values will fluctuate and are subject to credit risk of the issuer.

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Darcie Guerin is a financial adviser and branch manager at Raymond James & Associates Inc. at 606 Bald Eagle Drive, suite 401, Marco Island. Contact her at Darcie.Guerin@raymondjames.com, 389-1041 or toll-free (866) 343-0882.