For months now, Americans have watched the stock market fall and debated liquidating their portfolios.
But financial advisers have warned time and time again not to sell. It's only a paper loss, they said. In the long term the market will rebound.
However, it hasn't yet. Instead stocks have fallen further and are now at a six-year low.
So why do financial advisors tell us to stay in stocks -- and who can we trust to navigate the market?
Ann D. Witte, an economics professor at Wellesley College, said that some people push stocks -- even if they aren't the most prudent investments -- because they make larger commissions off such sales.
"Equities are oversold by both the financial planning community and the mutual fund industry," Witte said. "The reason is: they make more money out of equities than fixed income.
"There are very ethical people in financial planning and the mutual fund industry but there are also tremendous conflicts of interest."
But Witte said the real problem is a lack of financial education among Americans. For instance, she said, you shouldn't be investing in stocks if you need that money anytime in the next 10 years.
David Sinow, a finance professor at University of Illinois at Urbana-Champaign who used to be a full-time money manager, said stock investors need to look at the long-term horizon and said there's no way to time the market.
"No one has a crystal ball here and no one has the answer," he said. "Financial advisers basically say 'stay the course,' and in fact that's what I said."
Does he regret that decision? Not at all.
"I look at the stock market strictly mathematically," Sinow said. "I take all the emotion out of the stock market."
Still, Sinow acknowledges that many Americans have lost faith in the system, and their advisers, thanks in part to this "horrible gut-wrenching decline."
"The problem that revolves around trust is the lack of education," Sinow said. "When clients lose trust in their advisers it is because advisers have not educated people about the downside risks."
Benefits of a Financial Advisor
When looking for an adviser, he suggests investors ask not just what their expected return could be but also inquire about the range of losses.
Making good investment decisions is even more important these days because most Americans no longer have pensions or other similar defined benefit retirement plans. Instead they must rely on 401(k)s and IRAs.
"The investment responsibility has moved away from my employer to me," Sinow said. "We don't have the safety net. In fact, the only defined benefit out there any more for most of us is Social Security."
So does the public have a distrust of those giving them advice?
"Yes and I'm really glad that they have it because they should," Garrett said. "Many of us in this society needed a huge kick in the gut because we had gotten this attitude of entitlement: the stock market goes up most of the time."
Michael Zhuang, the president of MZ Capital, a Maryland-based investment advisory firm, said that "at the time nobody could predict if it was going to go down or go up."
"When planners talk about long-term, we generally talk about five years," he said. "If you need the money within three years then you probably shouldn't be in the market to start with."
Zhuang said that investors might feel burned if their advisers gave them false expectations.
"If a planner has promised his client that he can predict the market, then the trust is lost," he said. "For a planner, at least in the short term, it is almost impossible to predict the market."
Even Warren Buffet Has Lost Money
Zhuang noted that even legendary investor Warren Buffett has lost money in the short-term.
"He has recommended buying things since the middle of last year and so far he hasn't been right," Zhuang said.
Since the beginning of the year, stock in Buffett's Berkshire Hathaway has fallen 18.6 percent. In the same period, the Dow Jones industrial average has lost 14.9 percent of its value.
Zhuang is suggested that people with long-term goals still buy.
"The market is at a discount now," he said.
But could it go down more? Sure.
"We humans simply can't predict the future. That's God's job," he said. "Don't let your emotions fluctuate with the market. Stick to your plan."