Financial advisors report calm among investors

By DAN KEGLEY/Staff

Two Smyth County financial advisors, one affiliated with an international investments firm, the other independent, say local investors are in no rush to sell amid both valid and media-hyped concerns about instability in the domestic and international markets and economies.
Tom Graham, a financial advisor with the Edward Jones branch in Marion, said Monday he is seeing “three or four times the foot traffic and calls,” but that of his 1,300 clients, only one has elected to sell out his investments.
“Most of the people we have are long-term investors,” Graham said. “We don’t have people who are buying and selling.”
Those are what investment counselors call market-savvy investors who know that while markets historically grow, they hit turbulence, even crashes, along the way, and that those are not the times to sell.
In fact, Graham said, now is a good time to invest in products like 401(k) plans. “If you’re putting money in, you’re getting stuff for 30 percent off.”
Durable goods purchases also make sense, according to Graham. “This is a good time to buy a truck or a house,” he said.
Talk on the street is of a looming Wall Street meltdown, of a second 1929-esque market crash and a new Great Depression. That’s overblown, according to Graham.
“You have to take a step back from what you hear on the news,” he said. “Is Wal-Mart going to close? Yesterday, I had to walk across half of the parking lot” to the store from the first available parking space.
“The best thing for a lot of people to do is turn off CNBC,” Graham said, referring to NBC Universal’s Consumer News and Business Channel, an old name long since abbreviated. He said last summer the channel promulgated a recession, but his family could hardly find a parking space at Myrtle Beach—not a symptom of recession.
“If this is the worst it’s been since the Great Depression,” he said, “this isn’t too bad.”
Part of the difference between 1929 and 2008 is “back then, we didn’t have 24-hour news,” Graham said. Each news outlet, he said, “wants to have the next alarming adjective.”
Graham said there are some real concerns people have to face, like the cost of oil, “up today $25. It doesn’t make sense, but it sure doesn’t look like the sky is falling to me.”
Graham said the old formula for staying afloat in market turbulence is diversification of stock portfolios across industries and stock types.
In Saltville, Hogston Financial’s Larry Hogston left a firm and went independent in 2003, but a non-competition clause cost him hundreds of clients. He’s rebuilding and has 25 clients now, none of whom have bailed out of the market.
“I’ve had a few nervous clients, but none has said they’re pulling out,” Hogston said.
Hogston concurred with Graham about the media’s role in exacerbating valid concerns, and added politicians share some of the blame.
“The media and politics panic people,” Hogston said. “There are all kinds of experts after something happens, but you never hear from them before it happens.”
Hogston said a group of market analysts with whom he met Monday were shocked by current turbulence and the sinking of venerable firms like Lehman Brothers. None of them, he said, could predict the course or duration of volatility.
“These are trying times,” he said.