In times of market volatility, many people call their fund manager, their broker or their banker to find out what's going on and how they should adjust their portfolios. But fund executives say that the subprime crisis, so far, has not led to knee-jerk decisions.
Even though the call volume has been high lately, Jeff Morley, vice president of client service support for Charles Schwab, said it is "nothing that could be characterized as a panic."
"We are exhibiting the normal tax season patterns at our call centers," he said. "We have a goal to answer 80% of our phone calls within 30 seconds, and we meet that goal almost every day."
Morley said investor reactions are very individualistic and, so far, there hasn't been a surge in questions about any specific area. "Call volume is usually driven by the market's day-to-day events," he noted.
Morley said call volume increases when the market surges or drops more than 200 points in a day, and concerned investors are usually calling to find out more information, such as the driving factors behind the market movements.
"Many of our brokers spend a fair amount of time looking at media outlets and following the news," he said. "We also urge our clients to use our online tools to take a closer look at their portfolios. We want them to take a deeper look at their portfolio and see how it's configured first" before they make any big moves.
"People get confused," said Keith Piken, managing director of personal retirement solutions for Bank of America. "They get overwhelmed, and they need to have a plan. Consumers just want to be reassured that things will be O.K."
Investors should save early, save as much as they can, and try to remain diversified, he said.
"Market cycles happen," he said. "Investors should plan for the unexpected and realize that even the best-laid plans can get off track."
Likewise, MME's sister publication American Banker reminded readers last week, in an analysis of the Treasury Department's restructuring proposal and Graham-Leach-Bliley's contribution to the subprime mess, that regulatory fiscal crises have occurred in the history of banking legislation.
As long as an investor has a commitment to savings and to their retirement, market conditions shouldn't have much effect on their asset allocation, BoA's Piken said.
"IRAs are agnostic to market conditions," he noted. "An IRA is more about a commitment to your retirement and finding what asset allocation is suitable to an investor's risk tolerance and goals."
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