Published: October 18, 2008 07:49 pm      

Financial experts remain hopeful

Planners urge clients to keep money invested in stock market

Given the country’s current economic situation and the unpredictability of the stock market, many local investors may be questioning what to do with their financial holdings.

But local financial experts are maintaining an optimistic outlook while telling clients to resist the urge to pull out of the volatile market.

“When the market comes back, it comes back in a progressive manner and in a very short period of time,” said LPL Financial adviser Dave Workman. “Those who cut their losses, have in fact cut their gains.”

Workman, who has been dealing with finances for the past 23 years, said the current market situation is different from anything he has seen in the past.

“It is as fearful and emotional as any kind I have dealt with,” he said.

Looking strictly at the percentages, Workman said the current market decline is not as severe as it was during the downswing of the technology boom in 2002. Even when the market fell 22 percent in one day in 1978, it happened so quickly that people didn’t have time to react emotionally as they are today, Workman said.

Still, the nation’s current economic downturn along with the faltering real estate market make it difficult for people to let their investments ride.

Ron Miller, a local adviser at Raymond James Financial Services, is telling investors to think twice before cutting their losses and pulling their money completely out of the market.

“Every market condition we had in the past, it has come back,” said Miller. “They are selling at the lowest part of the market.”

In recent weeks, frightened investors have been pulling out by the thousands. With falling consumer confidence, the Dow Jones industrial average fell 22 percent in a two-week period at the start of October.

However, Miller said if investors take their money out now, the outcome may not be positive.

“If they pull their money out now, it is lost and they will never get it back,” said he. “If they stay in, I think they will gain it back.”

Miller said the market moves in large chunks when it is bouncing back, and he pointed to Monday’s 936-point gain in the Dow Jones as proof.

Agreeing with Miller, Workman said the market usually recovers quickly.

Still, Workman said several people have come to him concerned for the future of their investments and seeking out advice.

With clients in 26 different states, he said he encourages people to call and visit on a regular basis.

“Their biggest concern is the unknown — how bad will this be?” he said.

The market shifts have led many to tune in to watch financial shows or look for updates on the Internet almost around the clock.

Workman said his main goal is to help individuals remove themselves from the pressures of the situation so they can make a well-informed decision.

“You must divorce yourself from media bombardment and emotional wear and tear, and try to make a non-emotional decision based on fact, history and knowledge, more so than on the moment-by-moment ticker tape everyone has come to love,” he said.

Both advisers suggested that people limit their exposure to media coverage of the stock market to help prevent them from making snap decisions.

Both also said the only time to consider pulling money out of the market is if their worry is causing harm in their everyday life.

“Extreme anxiety and worry are the only cases to consider liquidation,” Miller said.

Overall, Miller said the best advice he can give to the general public is simple.

“Talk to your financial adviser,” he said.

As for Workman, he remains optimistic for the future of the stock market and those invested.

“I would say it is impossible to look at the past and say what is going to happen today or tomorrow,” he said. “Long term, I believe the market can recover and well managed portfolios will be able to make money in the future.”

Denise Massie can be reached at (574) 732-5151 or via e-mail at denise.massie@pharostribune.com