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Ignore Fear-Mongering Pundits and Focus on the Future, says Ric Edelman

For Immediate Release
October 08, 2008

Media Contact:
Mark Bagley
703-227-0541
mbagley@RicEdelman.com

FAIRFAX, Va., Oct. 8 -- It is vital that investors reject the tendency to panic that has already overtaken a number of pundits as a result of two consecutive days of deep declines in the stock market — and concentrate on the long-term, according to renowned financial advisor Ric Edelman.

“Over the past two days, many consumers have panicked and dumped the very investments they bought for long-term investment purposes,” said Edelman. “By selling low, they may never recover their losses.”

Edelman blames media pundits for recklessly scaring consumers into a panic. “Investors had already started this week in a nervous mood,” said Edelman, noting that the government’s rescue plan had been just signed into law on Friday. “The markets will need time to work through the issues, and it is irresponsible to scream fire in a packed movie theater, which is what some pundits are doing.” Edelman said dramatic antics on television by well-known commentators serve no useful purpose and only make the situation worse.

“Some of the people doing all the talking don’t actually manage any money for anyone — all they do is talk, with no accountability for their statements,” said Edelman, whose 22-year-old firm manages $4 billion in assets for 10,000 individuals and families nationwide.

Edelman noted that under the rescue plan it will take several weeks for the Treasury Department to even begin disbursing the $700 billion into the economy, and it will take additional time for that cash infusion to improve the economy. “But improve the economy it will,” he said. “We must be realistic, and we must also be patient.”

Edelman provided the following recommendations for consumers concerned about the stock market’s 13% decline over the past five days.

• Investors who do not plan to spend money from their portfolios for three to five years or more: “If you have a properly diversified portfolio, take no action. Smart diversification, along with regular rebalancing, will continue to help control volatility.” Such investors should take advantage of these times, Edelman said. “We believe that these times represent a historic opportunity to buy additional shares at what will be remembered in the future as one of the great low points in history, similar to those offered in the aftermath of the Crash of 1987. Give serious consideration to investing additional money into your portfolio.”
• Investors who plan to start withdrawals from their accounts in less than three to five years: “If you and/or your financial advisor have factored this into your portfolio allocation, you do not need to take action. If you haven’t considered the approach of retirement, or other pending need for cash, seek the services of a financial advisor immediately.”
• Investors who are already withdrawing money on a monthly or annual basis: “Withdrawing money means selling shares — and shares sold won’t exist when the recovery occurs. Therefore, we recommend that, if needed and where possible, you consider reducing the amount and frequency of withdrawals from your portfolio at this time. It is better to reduce expenses where possible and use other existing resources, such as excess cash reserves, to supplement spending needs.”

Edelman has written six books on personal finance and investing. His current best-seller, The Lies About Money (Simon & Schuster) will be re-issued in paperback on Oct. 14. He hosts The Ric Edelman Show, heard nationwide on the ABC Radio Networks, and has been named to Barron’s annual ranking of Top Financial Advisors five consecutive times (2004-2008). For more on Ric Edelman visit: http://www.ricedelman.com/cs/about_ric .

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 rankings “Top 100 Financial Advisers,” 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.

The opinions expressed herein are those of Ric Edelman and not SMH Capital Inc, or Edelman Financial Services.