Forget Daily Fear: Stocks Still Up for the Year

Aug. 10, 2007 — -- Wall Street is full of doom and gloom these days, but for the average investor in for the long term things are not that bad.

Yes, stocks have taken a major hit in the last few weeks, but those loses have just erased a strong, quick run-up in stock prices in late spring and early summer.

For the most part, investors are still ahead for the year, having more money in their portfolios than they did on Jan. 1.

It was just a few weeks ago when all of Wall Street was giddy over the Dow Jones industrial average hitting 14,000. Since that milestone, the Dow has been on a roller coaster ride, falling 146 points one day and then climbing 150 the next, mostly on fears about the housing market.

Several big, one-day drops have brought the Dow down to just above 13,000. Since the average hit 14,000 July 19, it is down more than 5 percent. Thursday the Dow closed down a whopping 387 points, after more concerns emerged about the subprime market, scaring off investors.

But for the year, the Dow is still up more than 6 percent. And unless you are a day trader, that's what counts. The other major market indicators, the NASDAQ and Standard & Poor's 500, are also both still up for the year, 5.5 percent and 2.5 percent respectively.

Three financial advisers surveyed by ABC News say that for investors, this is the time to stand pat, or even buy stocks.

"If you have cash to put in the market, buy. We're not concerned with short-term volatility, we're interested in long-term investing," said Samantha Macchia, chief operating officer of Summit Financial Strategies in Columbus, Ohio. "We haven't had many clients calling this morning, which goes to show we've educated them well."

Jim Blake, general partner and technical investment strategist with StreetTalk Advisors in Houston also said this is a good time to buy.

"Guys that buy here are at worst going to be back in the next couple of months," he said.

And Joe Theissen, senior investment analyst with GV Financial in Atlanta, said that he doesn't believe the problems of the last few weeks indicated a fundamental move or correction in the market.

"Some financial institutions like hedge funds are getting called and they have to sell some stock. What we're really seeing is advanced investors getting squeezed," said Theissen. "I am telling clients this is a great time to buy. If you can add to your 401k and buy, do it, because this too shall pass."