Save Money / Consumer News
Experts advise small investors to stay calm
LOS ANGELES (KABC) -- The stock market's wild swings since the U.S. credit downgrade are creating anxiety among investors. Many are wondering if they should pull out of the market completely.
One way to help with the fear of the volatility of the stock market is to talk to a financial advisor. Even if you're a small investor, it can help you make better decisions.
Advice from Alan Whitman of Morgan Stanley applies to most investors.
"One of the worst things that people will do is they're going to react and let their emotions drive their decisions," Whitman said. "Generally, that tends to be the wrong decision. Not always, but most of the time."
The last two days are a good example of that. If you had pulled out of the market Monday, you would not have made Tuesday's gains.
Because of that, some investors believe gold is the answer and are putting much of their money into the precious metal.
However, Whitman says you have to buy it for the right reasons.
"You don't buy it because it's a speculation or you're trying to get rich quick," he said. "You buy it because you believe it needs to be part of your overall mix."
Whitman says don't ignore your investments, but review them.
"Especially in times like this, they're causing concern. They should be looked at. It doesn't always mean you'll change, but it does mean you audit-examine. You should be doing that anyway, but it's really important to do it at this point," he said.
wall street, finance, economy, save money / consumer news, ric romero
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