Local Financial Planners Advise Folks to 'Sit Back and Ride Out' Week's Violatile Markets

After a wild week on Wall Street – the worst since the 2008 financial crisis – local financial planners are telling folks not to panic.

“The sun will come out tomorrow and you’re going to have a cup of coffee at Starbucks,” said Pat, a financial adviser for Raymond James Financial Services in Orland Park. “People get scared because of all the geopolitical stuff.”

On Thursday, the Dow closed 500 points down – the worst closing since December 2008. On Friday, markets rallied closing 60 points up because of a better-that-expected jobs report that showed U.S. unemployment decreasing from 9.2 to 9.1 percent.

“Most of our customers are experienced investors,” Pat said, who did not want to give his last name. “Some of our clients were buying today (Friday). They’ve seen the panic selling before. If you held out in 1987 and 2008, anyone who didn’t sell and rode it out came back.”

Many of the calls Pat received Thursday and Friday were from customers getting scared while watching Bloomberg and CNBC.

“There was even a guy telling people to sell everything and go to cash,” Pat said. “These shows are geared to short-term traders. I’d like to see a show for long-term investors.”

Fear mongering by the media has generated panic selling, when actually in the past three weeks companies’ earnings have been great, Pat said.

He says he spends most of his time talking people out of trades, including an elderly woman who called him all worried on Thursday asking if she should sell the Exelon stock she’s held since the 1950s.

“I told her, ‘You went through Korea, Vietnam, the 1970s, Carter, 2008 and you’re worried about raising the debt ceiling,’” Pat said. “The media generates a lot of this. When there is chaos the best thing to do is sit tight and ride it out.”

Over at Progressive Financial Planning Services in Oak Lawn, financial adviser John McInerney said the phones have been surprisingly quiet despite the week’s volatile market.

“We made a couple of calls on Thursday telling people where they stand,” McInerney said. “Most of our customers have balanced funds. We don’t have anyone aggressively invested in stocks.”

McInerney said those with stock portfolios should wait for the markets to settle down before moving their investments into a balanced fund.