Desperation is a terrible motivating force for investors
August 11, 2009
Jack Ablin figured the phone calls would be coming. Like many money managers, he was faced last winter with clients who wanted out of the stock market, period, as share prices collapsed to 12-year lows and the end of civilization seemed like a reasonable possibility.
Now, with stocks up 50% or more since March — and the sun still rising each morning — “guys who pulled the plug want in again,” says Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago.
“Sell low, buy higher” isn’t the ideal investing strategy, but it’s the one plenty of people have had to follow this year to keep their sanity.
Mentally, it was just too difficult for many investors to stay in the market as it crumbled. Five months later, with stocks in a powerful rebound, those same investors face the anguish of watching the boat sail away without them.
Stocks rallied Friday to new 10-month highs after the government estimated that the economy lost a net 247,000 jobs in July, the smallest monthly drop since August 2008. The Standard & Poor’s 500 index rose 13.40 points, or 1.3%, to 1,010.48, lifting its gain from its March low to 49.4%.
The employment report added to the growing body of evidence that the economy has reached some kind of bottom, and may start to expand again between now and year’s end.
For more information, please visit http://www.latimes.com
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