A bell sounded in Henry Harris' University City office Monday, signaling the end of the trading day.
“Wow,” the financial adviser said, frowning at a chart on his computer screen. “That's a new low for the last two years.”
Stocks plunged Monday amid news of Lehman Brothers' collapse and growing questions about the future of insurance giant American International Group. At the markets' close, the Dow Jones industrials had fallen 504 points, or 4.4 percent, to 10,917, the worst percentage drop in nearly seven years.
The developments have left Harris, president of Spark Asset Management Group, fielding questions from investors about where to go from here.
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“There's definitely the temptation to panic,” he said. “There's that sensation you get going over the edge of a roller coaster, that sinking feeling in the pit of your stomach.”
It's Harris' job to encourage clients to avoid emotional, knee-jerk reactions and, in most cases, keep their money where it is, he said. In many cases, markets rebound quickly, and clients with diversified portfolios will usually come out of a crisis unscathed, he said.
Still, there are questions: Will I have enough to live on and retire with? Will I be able to leave something for my kids?
One client who called Harris Monday was a retiree concerned about his investments. Harris walked through the portfolio with him, assuring him that he was broadly diversified, revisiting why the man owned what he owned and seeing whether his risk tolerance or other factors had changed. If not, Harris told him, it was best to hold steady.
Another client, a man in his mid-40s, called for a different reason: He was hoping to take advantage of the lower prices and buy stock, Harris said.
“Depending on where you are in life, volatility can be your friend or foe,” he said.
Even with the dismal close Monday – and the possibility of more questions from clients – Harris is confident in his strategies, he said.
“I have a long-term slow and steady philosophy,” he said. “I'm not, nor are my clients, looking for a quick hit.”
Besides, this isn't the first time the market has dipped. There was Sept. 11, 2001, for instance, when stocks plunged after the terrorist attacks. And there was the Persian Gulf crisis, when Iraq invaded Kuwait in 1990, prompting an immediate 6.5 percent drop in the Dow Jones and a 21.2 percent decline by October as investors feared an oil shortage.
Harris was flying a helicopter for the U.S. Navy in the Persian Gulf when the stock market crashed in 1987. He remembers listening to BBC news on his longwave radio and realizing – with that familiar sinking feeling – it would take two weeks to get any information back to his stockbroker. So he did nothing. By the end of the month, the market began to come back.
“I firmly believe we'll get back above these levels” this time, Harris said. “I just don't know when.”