Wednesday, January 23, 2008
Area investment advisers suggest calm
Investors should pay no attention to the gloom and focus instead on the long term, they said.
Related
Most local stocks bounce back
The Roanoke Times
Message board
Area financial planners are handing out this key investment advice to their clients -- don't watch television.
Wild swings in the stock markets on Tuesday likely created angst among those who bank on such investments to fund their futures.
But planners are urging customers to ride the tide in hopes that their investments -- and the economy -- will experience a resurgence. Giving into the hype of the situation fuels greater fear, they said.
"Our clients have been through a market like this before," said Mike Jones, a registered representative with Joel S. Williams & Associates, a financial planning firm in Blacksburg. "They know they have been rewarded with sitting tight."
Jones' firm e-mailed letters to its clients last week discussing current economic conditions.
The letter did not forecast the stock market's downward spin this week, but it did signal declining investor sentiment, he said.
"A lot of times people, if they don't call, they wonder," Jones said. "We probably headed off a few calls" with the letter.
Blacksburg resident and Virginia Tech professor Greg Jenkins said he took the stock market's volatility in stride with no plans to make sudden moves.
He has equity securities to fund future retirement and his three children's college education, based on "a 20- to 25-year time horizon," Jenkins said.
"My view is, you continue to invest," he said. "You do it in a systematic way. You do it in a way that makes sense, given your age and given your risk factors."
A Roanoke financial planner, Dave Arthur, said he fielded a few inquiries from customers who were nervous about their portfolios' performances on Tuesday.
However, Arthur said he barely had time to answer his phone. He was too busy buying stocks at low prices.
One of them was Bank of America. On Tuesday, the bank announced that its earnings had tumbled, blaming the country's lending crisis.
"This is just one of those great opportunities that you can't afford to miss," Arthur said in an excited tone, reflecting an upbeat outlook on the day's events.
No one has a crystal ball to predict the stock market's day-to-day activity, but financial planners are poised to offer investment help.
It's best for people at retirement age to invest in a balance of stocks and bonds, said Virginia Tech finance professor Vijay Singal. He wrote "Beyond the Random Walk," a book published in 2004 about the stock market.
"As you get older, you want your portfolio to become less risky," he said.
For those in their 20s through 50s, stocks -- including international stocks -- should be the primary investment, Singal said.
But while the market is volatile, "I kind of sit back," Singal said.
"It's not a good idea to watch the market every day, morning and evening," he said. "Look at it once a month, so that you keep your cool."
