Trusting the numbers

Christine Carrillo

As the stock market continues to take drastic dives and steep

inclines, brokerages in Newport-Mesa are working hard to reassure

clients that the stock market remains an excellent avenue for them to

reach their financial goals.

As a result, their jobs are often as much about earning trust as

crunching numbers.

With clients here generally focusing on similar long-term goals,

like college funding and retirement, investment specialists have

tailored their advice and often face familiar questions.

“It’s important that people don’t follow the herd, as we call it,”

said Jeffrey Paulson, Charles Schwab vice president and Newport Beach

branch manager. “Two years ago when the market was at its high it was

‘buy, buy, buy,’ and now two years later when the market is at or

near it’s low period it’s ‘sell, sell, sell.’ People just tend to buy

high and sell low, which is kind of the opposite of what we help

people to do.”

To the untrained or uneducated investor’s eye, the constant

reports of both high and, more frequently these days, low indexes can

appear to be detrimental. However, most financial consultants are

trying to relay to their clients that the everyday volatility of the

market will not directly impact a well diversified and long-term

planning investor.

“We believe that if you properly diversify your portfolio, than no

matter where the world is turning, one way or another, you’re always

winning in some category,” said Sanford Coggins, Merrill Lynch vice

president and senior financial consultant. “The objective is to stay

in the market, ride it through and just have a professional there to

coach you through it.”

Coggins added that the balance diversification provides enables

investors to wade through the rough waters by not having to worry

about being knocked down by drastic change.

That comes, however, with an investor placing trust in a financial

advisor, Coggins said.

Trust has become a major concern of investors. In addition to

their concerns about the volatility of the market, many local

investors have also expressed trepidation about the increasing news

regarding corporate ethics and national governing surfaces.

“Economically we’re looking very strong, but the investors

perception is that they can’t trust the numbers; they can’t trust

corporate America; they can’t trust the current political party,”

Coggins said. “It’s really put a fracture in their confidence and as

a result the people that were sitting on the sidelines are pulling

out, a combination of fear and being unfamiliar with a long enough

history to know that these types of things happen.”

In looking back throughout history when the market and the

national economy struggled during times of duress, like that of Pearl

Harbor or the fall of the Berlin Wall, Coggins believes that those

moments of uncertainty, many of which led to an incline within the

market, should provide some assurance to nervous investors currently

in the market.

“My reality for clients is that the goal is not about whether A,

B, C or X, Y, Z, makes money today,” Coggins said. “The goal is to

get you from point A to point B.”

Generally, the process of establishing a portfolio for a

prospective investors is based on establishing a plan, preferably

long-term. Focusing on the value the client has placed on his or her

money, their particular needs, goals and objectives, in addition to

the current market figures, financial consultants provide

recommendations best suited for them.

Therefore, when the market shifts, consultants re-evaluate each of

their clients’ portfolios to make sure that their current investments

are working toward their personal financial goal.

“What were doing is trying to contact our clients to reassure them

about the stock market and their own personal holdings,” said

Paulson. “It’s just a matter of individuals needing to be

well-diversified and just have a good plan to kind of make it through

this down turn and be prepared for a turn-around.”

However, despite how well-diversified investors may be, they all

seem to flock to their financial advisors for a similar reason: They

want reassurance.

A bear market has continued to stir the nerves and concerns of

investors throughout the years and yet, the market, as many

consultants try to show their clients, has always bounced back.

“The fundamentals of the economy are very strong ....I think the

only question in the minds of sort of the cross-section of market

investors is when the market will actually rebound,” Coggins said.

“It’s not a matter of if.”

Although investors may disagree about the exact time frame the

market began it’s downward cycle -- some say it over the last few

years, others the last year or so -- they all agree that it’s due for

a turn.

“We feel pretty good about the future and the turn-around of the

market at some point and the advice that we’re giving is the best

long-term advice that people can get,” Paulson said. “We feel

confident that stocks and equities are still the best way to go for

people to reach their financial goals and be able to retire some

day.”