Worried investors have inundated Robert Goldin in the past two weeks.
“With the market in turmoil, I’ve been getting 30 to 40 calls a day from investors worried about losing money again,” the Thornhill, Ont.-based investment dispute consultant said Friday. “In fact, two days ago it got so bad I had to take the phone off the hook.”
The callers are people who lost money in 2008, recovered somewhat in 2009 and are once again looking at losses. Mr. Goldin’s job is helping people who have lost money because of bad investment advice, but some of the callers are just plain afraid.
Buck up, investors. While stocks have fallen hard lately, the current stock market correction has been nothing like the blow-up of 2008-09.
In fact, the basic rules of diversification have been working fine in May, unlike the last time the markets plunged. Back then, all that saved you were government bonds and treasury bills. Everything else tanked, including preferred shares, corporate bonds and the sort of stable blue-chip dividend stocks that are often described as being defensive.
If you’re well diversified, you probably own some of these kinds of securities and thus you may have less to worry about than you think right now.
That’s a message that Jim Steel, president and portfolio manager at Polaris Financial in Ottawa, has been telling anxious clients lately.
“We did some reviews at the beginning of the year, before we had these huge dips in the market, and people were pretty happy,” Mr. Steel said. “But I’m getting a lot of calls now where people are saying, ‘Here we go again – is this going to continue?’”
To start with, Mr. Steel has spread client portfolios across stock markets in Canada, the United States and internationally. In 2008-09, this meant nothing because all markets cratered similarly. So far in May, it’s a much different story.
