LABJ Forum: Time to Take a Deep Breath
At a time when the stock market has been a rather unfriendly place, it’s difficult to know just what to do watch as your holdings dwindle with the hope they’ll come back in the future or take a bold step and make some changes to your investments? So the Business Journal asks: In light of the recent market turmoil, have you made any adjustments in your asset allocation?
Gary A. Meyer
Partner
Parker, Milliken, Clark, O’Hara & Samuelian
Despite a lot of trepidation, I haven’t, at least not recently. I am more inclined to make changes when the market bounces back. I would move some mutual funds toward paying down my house because I think real estate is something that is being viewed as more secure and because I plan to stay in my house a long time. Although I’ve lost money with Enron and Lucent and other tech companies, now is not the time to panic and sell. I think I will stay in the market, but I will reinvest a lot more cautiously. In the future, I will try to have a more balanced portfolio among cash bonds and real estate.
Tom Schulte
Managing Partner
RBZ LLP
No, I haven’t. We have seen the industry go up and down, through the cycles. I believe we are just in the downside of the same cycle we are always in and it will go up again. The only money I have in the market is invested in long-term plans. I don’t adjust any long-term investments for short-term problems. If I were going to retire next week, it would be a different story. I believe that in the long-term, everything will be fine.
Carlos Lopes
Managing Director
Hotel Bel-Air
About a year ago, I decided to change my asset allocations to predominantly focus on bonds and utilities and preserve at least 50 percent in cash or cash equivalent investments. At that point, I felt the market was very overvalued and decided to take a much more conservative outlook for my own personal portfolio and that of my children. I left 20 to 25 percent in mutual funds and stocks, which I plan to ride out. I really believe that once the market adjusts itself, the stocks I held on to will do well again. Besides, selling when the market is down is not the smart thing to do.
Cynthia Futter
President and CEO
Summit Alliance
We have not. About two and a half years ago, we became concerned that the so-called stock market bubble was going to burst and took a lot of our money out and invested it in real estate. We didn’t know when things were going to turn, but we didn’t want to ride the wave for too long. As for the money we left in the market, we are just going to ride it out. We have stock in companies that haven’t had any accounting scandals or irregularities. We made a lot of money in the market in the last few years, and although we might lose money in the coming years, over time it has been a decent investment for us.
Audrey Stein
Executive Director
The Wellness Community
Yes. We’ve gotten out of some of the stocks that weren’t doing well and put more money into fixed annuities and bonds. I think how you react to the stock market depends on your age and whether you are investing for the long-term or for retirement, which is more short-term. If we were younger, I think there might be other decisions made. At our age, we are not ready to take any major risks because we are talking about our retirement. We’ll see how it goes, but there is a possibility of getting back into stocks depending on what the situation is.
