Shelter from the Storm

Investing During Turbulent Times

by Crispin Kott, September 28, 2009

The worldwide economic collapse of the past year may have left some local investors shell-shocked and wondering what their next move, if any, should be, but experts from across the region are suggesting now might be the ideal time to invest, as long as one considers all their available options.

While the media over the past year has been full of gloomy stories about the state of the world economy, some local investment experts have already seen signs of a potential recovery. Whether that recovery results in an economic turnaround may depend at least somewhat on whether individual investors begin putting their money back into play.

“People who have been sitting on cash since the bottom in March are still on the sidelines,” says registered investment advisor Beth Jones. “I’m poking and prodding them to get that money back in the market because things are still fairly reasonably priced, and they’re missing the boat. Some people have been moving that money back into the market, and that’s one of the reasons the market is starting to rebound.”

Jones is co-owner of Red Hook-based Third Eye Associates, a “life and wealth management” firm with offices in New York and Washington, DC.

“The markets always move first, so they go down first and come up first,” says Jones. “We’re not pessimistic, but it’s not clear if this bounce we’ve seen in the stock market over the last few months is a permanent situation. I think it’s going to be moving up and down for a while longer. Those boom years, where your house is going up 10 to 15 percent a year are over, as least in my lifetime.”

The Long Term
Robert Baker, assistant vice president and financial services officer with Ulster Savings Bank, agrees. “If you’re investing for the long haul, the best idea is not to panic,” Baker says. “The market is having a good upturn right now, so it’s a good time to invest.”

According to Jones, the best time to invest is often when the market is on the rebound. The real difficulty comes in convincing those who are timid to believe it.

“It does make sense to take advantage, even if you do it gradually over time, to do it now,” she says. “People do counterintuitive things. They feel like they shouldn’t put money into the market when it’s down, but that’s when it’s cheap. That’s how people who are wealthy made their money.”