Financial adviser calms nerves

Thursday, October 30, 2008 | 5:59 p.m. CDT; updated 11:03 a.m. CST, Wednesday, February 11, 2009
Edward Jones stockbroker Kathy Lou Neale encourages clients to buckle up and ride out the turbulence of the economic downturn.

COLUMBIA — Since the severe downturn in the economy last month, Edward Jones financial adviser Kathy Lou Neale has been fielding calls from many worried clients.

She is telling them to "buckle down, be patient and stay the course."

"I'm staying in touch with my clients to calm their concerns," said Neale, who runs the Edward Jones office at 1000 W. Nifong Blvd. "My seasoned investors aren't worried. They've been through recessions before and know that we all come through these things."

Neale has been helping investors for six years in Columbia, after moving from Jefferson City, where she lived for 25 years. Prior to the move, she was executive director of the Jefferson City Convention and Visitors Bureau, where she worked on economic development for the city.

During that time, she raised three children with her husband, Ed. Although her children are in different places in their lives, she said she helps them with their stocks.

Her own investing strategies have changed very little in response to the downturn, chiefly because she plans for the long haul, she said. 

Neale said she practices what she preaches. "I believe in the concepts and strategies I tell my clients and practice them in my life," she said. "I still invest regularly in my 401K and in my retirement plans."  

Neale warns her clients against making drastic changes in their strategies, a course many worried Americans have considered in reaction to some of the conflicting opinions they've heard from media outlets.

"I would say the media isn't helping," she said. "Clients hear so many differing views. ... There is so much information shouted at them."

According to Neale, this leads investors into panic and poor financial strategies.

"Panic isn't a good investing strategy," Neale said. "Investors need to keep emotions out of investing because economic decisions should be based on facts and history. Emotions lead to buying high and selling low, which means you lock in your losses."

This is where Neale and other financial advisers come in. They help their clients keep reality in check, she said. 

"Brokers are not losing clients. This is a time people need advisers because they calm nerves and ease confusion in difficult times," she said. 

To assuage panicky clients, she has boiled down the situation into a simple simile: "Investing is like traveling by flying, and the market is like the plane.

"If the pilot comes on the intercom and says, 'Ladies and gentlemen we're experiencing turbulence; sit down and fasten your safety belts,' do you jump off? Of course not."

"Well," Neale said, "we are experiencing turbulence."

Although she recognizes that "this isn't a run of the mill downturn," she emphasizes the importance of sticking to established investment plans. 

Her clients vary from the young, new investor to the retiree.

When she initially sits down with a new client, she said, "I let people know the market is cyclical, because they need to know that before they tie up their money.  We access the risk and discuss their goals before we start."

Neale focuses her clients on "time in the market instead of timing the market." It is safer and more profitable to invest in quality, rather than attempt to time the best day to buy or sell the riskier stocks that sharply fluctuate, she said.

She knows  the economic downturn will affect some of her clients more than others. Neale encourages clients who pull from investments for day-to-day expenses to cut back on the percentage they withdraw.

But for those clients truly in for the long haul, she tells them to "open your eyes and close your ears to the media. There are very good values out there on strong companies who have historically paid well."

"It's like the stocks are on sale," she said.  "Some of us will look back and say: I wish I had bought more during this opportunity."

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