By Mark Wineka
mwineka@salisburypost.com
If you haven’t noticed, the real estate bubble has popped ó big time ó and a massive cleanup is taking place.
It led Monday to the worst day on Wall Street in seven years, as the Dow Jones industrial average lost more than 4 percent of its value.
About $700 billion seeped out of retirement plans, government pension funds and other investment portfolios. The venerable Lehman Brothers investment bank failed, and Bank of America bought out a troubled Merrill Lynch.
It has understandably caused a lot of hand-wringing and portfolio-searching among investors.
Charles Parks, owner of C.F. Parks & Co., says if you’re short-term oriented investor, “You’re in the wrong place at the wrong time in history.”
But if you’re long-term oriented with your investments ó retirement or otherwise ó Parks advises to turn the volume down on all the business shows on television.
Put blinders on, “and keep trudging forward,” he said.
Parks tells his clients to take emotions out of their financial decisions and realize this is one of those times that come every so many years ó remember 2001 and 2002 ó when things in the investment world seem to be at their worst.
“Shoes are falling, the mess is going to be ugly, and the new regulation will come,” Parks said Tuesday.
The best thing investors can do is ride it out, stay the course with their financial plan and know the times for their investments will be good again, according to Parks.
“Success comes from being consistent in what you do,” he said.
Parks has his own clients pretty much trained to expect the market’s ups and downs, even plan for what he calls “a throwaway year.”
So clients aren’t really asking him what investment changes they should make.
“Most of my e-mails and phone calls wonder when is this going to be over with?” he said.
The bad part of trying to move in and out of investments and in and out of the market is that nobody will ever have the timing right, Parks said.
A person doesn’t want to bail out of his or her portfolio, for example, when the market is at its lowest.
“And my crystal ball’s no better than yours,” Parks said.