Top Planners Weigh In on What to Do Now
Oct. 18 -- So, maybe you thought in these salad years of 20 percent-plus average market returns that you’re an investing genius and a natural do-it-yourselfer.
Or, maybe you thought all that yammering from your financial planner about, “Diversify, diversify, diversify,” seemed like so much old-school hooey. Is that your final answer?
Market Wake-up CallAs the market events of today and, indeed, the past six months show, the market punishes those who disregard long-held investing principles. Today’s market is a wake-up call to those investors who thought that high double- and triple-digit gains were the norm for the stock market. If you’ve heeded your planner’s advice on diversifying, you’re probably weathering the storm OK, but if you just couldn’t resist the allure of pricey growth stocks, you might be feeling some pain.
What do you do now? That’s a question investors across America would love to ask of the best financial planners out there, if only they had access to them. Well, now you do. We surveyed some of the tops in the business about what they’re telling their clients today. Here are the results.
A Healthy Correction
Marilyn Capelli Dimitroff , a certified financial planner at Capelli Financial Services in Bloomfield Hills, Mich.: Dimitroff is telling her clients to stay the course and thinks the market drops could even be a good buying opportunity if an investor has some new money to put to work. “The best advice is to stay put,” Dimitroff says.
“The market occasionally has these bumpy periods and that’s the price you pay for getting the returns.” Though she favors equities over bonds, Dimitroff says she urges investors to keep a fixed-income component, namely short-to-intermediate-term high-quality bonds in their portfolios to cushion the blow of rough markets. The planner also thinks the market’s correction is a healthy reaction to what she considers some overvalued stock prices over the past few years.
“I do think there could be a period where stocks will underperform for a long period of time,” says Dimitroff. “What we’re seeing now is a result of a lot of factors that have been out of whack from some time. We will start from a lower base, but I still think the market has a lot of strength.”
