Investor Panic Worsens Effect of Bear Market, says Edelman
For Immediate Release
August 04, 2008
Media Contact:
Mark Bagley
mbagley@RicEdelman.com
703-227-0541
FAIRFAX, Va. -- Unease and even panic over the current bear market is prompting the wrong reaction from too many investors, according to a new report issued by renowned financial advisor and author Ric Edelman.
“The constant stream of negative news regarding the market and economy has led many consumers to make changes in their investments — even if they don’t really know what changes to make,” said Edelman. “They just feel pressured to do something.”
But for an investor who has maintained a properly diversified portfolio, structured for long-term growth, the correct reaction to the bear market is likely to be none, says Edelman in the report, titled Don’t Just Do Something, Stand There! Ric Edelman’s Guide to the Bear Market.
“Sure, nearly everyone’s portfolio has declined in value this year,” said Edelman. “But if you are fully diversified across multiple asset classes and market sectors, the decline is likely to be less severe. You are positioned to ride out this storm.”
For this component of the investing public, Edelman counsels patience during the bear market. “Every one of the 13 bear markets we’ve experienced since 1945 has been followed by a tremendous bull market,” said Edelman. “The S&P 500 has risen an average of 38.1% in the year following the end of each of the bear markets,” he said, citing data from Ibbotson Associates.
While the current turmoil in the market is likely to continue for a while, said Edelman, “We must remember that periods of unusually high or low returns are followed by periods of opposite performance, as the market returns to its long-term average.”
“The lesson to learn here is to develop a competent investment program and stay rigorously committed to it over the long term,” said Edelman. “Today’s economy is just a fleeting picture, but your need to achieve your long-term goals is not.”
Edelman, founder and chairman of Edelman Financial, is rated by Barron’s as the No. 2 independent financial advisor in the country. He hosts The Ric Edelman Show, broadcast each weekend on the ABC Radio Networks. Edelman’s current best seller, The Lies About Money, was named the personal finance book of the year in the Axiom Awards competition.
Edelman Financial is a marketing name for two affiliated registered investment advisers. Edelman Financial Services LLC primarily serves the Washington D.C. area; Edelman Financial Advisors LLC serves clients nationwide via its own advisors and unaffiliated registered investment advisers. Sanders Morris Harris Group (Ticker: SMHG) is majority owner of EFS. Ric Edelman is majority owner of EFA and minority owner of EFS.
Ric Edelman is an Investment Advisor Representative and offers advisory services through Edelman Financial Advisors LLC and Edelman Financial Services LLC, SEC registered investment advisers. Ric is also a Registered Representative of and offers securities for Edelman Financial Services LLC through SMH Capital Inc., an independent broker/dealer, member FINRA/SIPC.
Barron’s cover story “Top 100 Independent Financial Advisers,” August 27, 2007 (compiled by independent financial industry researcher R.J. Shook, based on assets under management, advisor’s contributions to the firm’s revenues and profits, quality of service, and client satisfaction).
An Index is a portfolio of specific securities (common examples are the S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance does not guarantee future results.
Ibbotson Associates is a financial research and information firm and is a wholly owned subsidiary of Morningstar Inc.
Rescue Your Money, written by award-winning financial advisor Ric Edelman, is your personal investment recovery plan.
