ShareThisHold steady with what you've got. And make new investments if they're high-quality, forward-looking and defensive at the same time.
That's the word from some older investors, particularly those for whom the Great Depression still resonates. They are taking what might be a surprisingly optimistic view of what's ahead.
"We were growing up in the last four to five years of the Depression," said Jim Barnhill, 77, a retired executive who lives in Raleigh, N.C.
"We know that stocks went down 60 to 70 percent then and then came back up. There doesn't appear to be any other alternative than to hold on."
These practices might be just what the recent bear markets need, said Janet Fox, an adviser at the ACH Investment Group in Raleigh, N.C.
"If people don't have faith in the market and they are not willing to buy, that will have an adverse effect, as we have seen," Fox said. "To varying degrees, we need to have confidence."
The members of the Raleigh Investors Club can look back at as many as six decades of market ups and downs. They're managing to stay calm despite the depressed stock prices and financial turmoil.
"It's not bad as it could be," said Doug Bryant, 76, retired from the family company Bryant Restaurants, which owns 21 Wendy's restaurants. "There's still a lot of economic activity out there," he said. "The growth has slowed tremendously, but maybe it needed to.
"It's going to come back; when it's going to come back, we don't know. It will probably move up in fits and starts."
Investors in his age bracket tend to have more diversified portfolios and to seek stocks that pay dividends, according to academic research. They've benefited in the long term from that Depression-marked mentality, which helped them retire with relatively few obligations.
"We do have a certain amount of optimism," said Casper Holroyd, 80.
These older investors' decision to move forward in perilous economic times rests on an experienced conviction that things will turn around.
"If people can get some confidence back in our banking system, I think we can come back," McMillan said. "The market will rebound strongly."
In a climate that has spooked even recent retirees, another financial adviser said, this mostly 70-plus crowd has a philosophy that many investors could profitably follow: Stick to quality and make sure your immediate needs aren't dependent on the swings of the Dow.
"They understand that you don't invest your short-term emergency money in the stock market," said Mark Fortier, of Edward Jones in Apex, N.C. "You take care of your income needs and your short-term money supply first. When you don't need this money for five years or more, that's when you invest."
Club members take turns offering up stocks as possible buys, conducting research for the presentations. A few flings with some lesser-known "wild" stocks led them to refocus on quality.
"Quality means investing in companies and or industries that over the longer term will be beneficial for you as an investor," Fox said.
"That does not mean every company, or every stock, or every industry is one that you should buy. This isn't the '90s anymore."
E-mail Thomas Goldsmith at thomas.goldsmith(at)newsobserver.com
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
Must credit The News and Observer of Raleigh, N.C.With OLDERINVESTORSSIDE
