Money managers get jitters as investor trust weakens. (Wall Street West).MONEY managers are worried about the effects of the thinning public trust in Wall Street. Clients are becoming balky as they talk about buying houses or looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. safe havens Safe Havens is a comic strip drawn by cartoonist Bill Holbrook and syndicated by King Features Syndicate. Started in 1988, the strip is currently published in more than 50 newspapers. . Even gold is getting some attention. The recent run of accounting scandals Accounting scandals, or corporate accounting scandals are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations. and earnings restatements--as well as revelations of shoddy shod·dy adj. shod·di·er, shod·di·est 1. Made of or containing inferior material. 2. a. Of poor quality or craft. b. Rundown; shabby. 3. analyst practices - is harming investor confidence at precisely the wrong time, said William "Bill" Mason, Pepperdine finance professor and money manager with Cullen Fortier Asset Management in Woodland Hills. "The scandals on Wall Street are driving the public away, just as the dollar is getting weak and there's talk we might have another spectacular terrorist attack," Mason said. "Add to that, the market is still trading at record-high multiples (price-earnings ratios), and thus is vulnerable." Mason excoriated Wall Street brokerage houses and federal regulators for "seriously underestimating how much the public is losing trust... and that trust is really going to erode if the market drops, which is likely." Already, inflows into stock market mutual funds have slowed dramatically. A medium-term bear or sideways market Sideways Market A situation in which stock price changes little over a period of time. Notes: Consequently, traders who follow trends when making their investment decisions will tend to perform poorly during a sideways market. may be in the cards, lasting into the second half of this decade, Mason said. The under-40 crowd might not remember, but the Dow seesawed for 15 years from 1967 to 1982. "It could happen again." Mason said. Still, that doesn't mean investors should abandon equities. True, the elderly and other risk-averse might want to shift into safe, interest-bearing instruments, such as government bonds, Mason said. But those under 40 might want to buy when things don't look so great on Wall Street, if they plan to stay in equities for the next several decades. "It's not the worst thing in the world to dollar-average (buy stock) on the way down' said Mason. 'The problem is that people usually lose their discipline, and stop buying when stocks go down." If there is another 9-11-type episode, young people might want to consider it a buying point, he said. Contributing columnist Benjamin Mark Cole Mark Cole is a multi-instrumentalist blues and roots musician based in Gloucester, UK Music Mark primarily writes and performs blues music but also writes and performs music influenced by other American roots music genres such as americana, cajun, zydeco, bluegrass and writes about the local investment community for the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Business Journal. He can be reached at sevencontinents@mindspring.com. |
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