MARKET NOSE DIVE SHOWS FEAR, MISPLACED ASSETS, LOCAL EXPERTS SAY

The Dow’s late-day plunge of more than 600 points Thursday reflected several major stock sell-offs, and some local financial professionals say it’s not the end of the volatility.

“People are panicking now,” said Rick Rignall of Rignall & Associates in Grand Junction, which has been in business since 1980. “They’re nervous. I don’t believe they trust what they’re being told, what they’re reading in the media or seeing on television. There’s a lot of people in the marketplace that really should not have been there to begin with. They should have been in safer investments with a lot less volatility — like in treasuries, money markets or fixed annuities.”

The Dow being down several days in a row, he said, is “certainly out of the ordinary. I believe the housing crisis and all the foreclosures is what actually started it, in my opinion.”

“There’s far more irrational fear now than is justified,” said Chris Doyle, a certified financial planner with the Center For Financial Planning. “I’m surprised by the severity at this point, but when you see people scared, they will literally feed off of one another’s fear and make it 10 times as bad as it should be.”

Some financial professionals say the market hasn’t hit bottom yet, and the people who should be the most concerned are retirees and first-time investors who put most of their collateral into high-risk stocks.

“We’re still going to see another 1,000- to 2,000-point drop again with what’s going on globally now,” Rignall said. “The international markets are starting to react to it.”

Doyle said what the market is going through is something it’s gone through before, such as when Lockheed Martin ran into problems in 1971, and when Chrysler Corp. had to borrow money from the federal government to stay out of bankruptcy in 1980.

“I would imagine some of the emotion in the market is going to take another week or two before it fully
shakes out,” Doyle said.

He said some of his clients’ investments are making money as a result of some funds being sold off.

Doyle said the biggest problem he sees in the sell-offs is that recent events, including the passage of the economic bailout and the collaboration between nations to cut rates, are going to take at least a couple of weeks to affect the economy.

“The ink hasn’t even dried yet,” he said.


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