Janet L. Marcantonio finds herself giving a lot of advice nowadays, but she’s not a psychologist. Maybe she should be. As president of the Rhode Island chapter of The Financial Planning Association as well as a vice president and financial advisor for Merrill Lynch, she said she’s found herself trying to instill some hope into pessimistic investors anxious about the downfalling stock market and deep mistrust in large corporations.
"We feel your pain," seems to be the advice of the times, she said with a chuckle. In times filled with stock market downfalls and an uncertain economy, financial planning should become more important to those who have invested in stocks, bonds, IRAs, 401Ks and other investments, she said.
In order to not only educate financial advisors but also the public on the growing importance of planning for the future, The Financial Planning Association of Rhode Island will be hosting its first consumer symposium October 8-13 at Bryant College’s Bello Center.
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The symposium is part of Rhode Island’s first Financial Planning Week, which will run from October 7-13, also sponsored by FPA-RI. Rhode Island was the first of 12 states in the country to have a gubernatorial proclamation declaring the week, Marcantonio said.
The purpose of the symposium is to provide consumers with informative seminars to help them to discover the value of financial planning. More importantly said Marcantonio, it will allow the public to ask financial advisors and planners how to prepare for a future that, right now, doesn’t look so bright.
This year, the FPA-RI wants to focus more on community outreach, she said, and promote the value of financial planning to those who might not be educated on it. During the day of the symposium, the public can take part in a number of workshops and listen to a number of discussions on topics ranging from saving for college, retirement, basic investment information, planning and insurance. Those interested can also make an appointment to speak to a Money Mentor, a 20-minute session with a certified financial planner.
"They can go in and ask just about any question they have," Marcantonio said. "It’s very broad." Because of the general sense of anxiety inflicted by recent stock market trends, there will also be a panel discussion on how investors can position themselves for recovery from the last two years.
"We want to make sure that’s a big piece of what we’re talking about," she said. "Know what your goals are; have a plan, where you want to be and what you need to get there."
During the past two years, Marcantonio said many investors didn’t think much about planning because the stock market was riding so high, Now they need to "take a step back and reassess their plan," she said. "What do I need to retire; how far off am I and what are my options," are some questions older investors should ask themselves if they want to retire soon.
"We have always preached diversification, but during the tech boom, a lot of people put all their money into that and if they did they got killed," she said. Advising those with aggressive portfolios like this who have lost a great deal of money, she said, depends on a person’s "risk tolerance.
"To most people we’d say, ‘don’t get out of the stock market. You’ve ridden it down this far,’ but diversify – definitely," Marcantonio said. Investors beware, she added – the stocks won’t ever be as high as they were at their peak.
Those with a low risk tolerance should weigh their options and possibly consider low-risk stocks or high-dividend-yielding stocks. Although there isn’t much potential for a high payout, the stocks are strong and do produce a steady dividend.
Putting all reservations and anxieties aside, Marcantonio said it is still very important for people to keep investing in the stock market.
"We’ve got a good strong economy, and everything is there to support a strong market recovery," she said. "The things affected by it (the stock market decline) aren’t the fundamentals; companies are beginning to show profits" and stocks are gradually doing better.
"Consumer confidence is a big issue," Marcantonio continued. "The terrorist threat is new to this market. Every investment has risks; the question is to what extent."
For those interested in investing, the FPA web site, www.fpanet.org, features information on choosing a financial planner, as well as a search engine for finding one near you, and different kinds of investments. "Talk to someone and find out what their process is and how they get paid," Marcantonio said of finding an advisor or planner.
The sooner, the better is advice to live by when investing, she said. The younger you are when you begin your investment, the better off you’ll be when it’s time to retire. Prime time for beginning a Roth IRA or 401K is in your mid-20s.
"If you could see examples of people investing at 25 versus 35, it’s just amazing," she said. Investing just 10 years earlier in your 20s could mean a difference of hundreds of thousands of dollars when your 65. Marcantonio suggested to young investors to put in as much money as possible every month; the maximum allowed for a particular plan is the best bet.
"Especially someone under 30," she said. "You should really have 80 percent of it in the stock market. You have such a long time to rebound" from any future recessions or downfalls.
Recent trends in investments have occurred in the wake of September 11, Marcantonio said. "There was a flight to value and security, and people who might have had more aggressive investments in stocks have shifted to bonds."
Although every investor should allocate their money in a way that makes sense for them, she said that those who decide to shift to bonds are doing it a little too late. "People who are shifting now should have done it two years ago.
Soon, the nation will see the beginning of a stock market recovery, Marcantonio predicted.
To worried investors, Marcantonio suggests, "don’t overreact; stay your course. Keep revisiting your plan. This too will pass."
Hopefully, investors working with her and her associates have already had their money allocated correctly and "we’re looking at the whole picture," she said. "Stay the course and just keep an eye on where you’re going and to not look only at the short term."
