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Stock, bond investments under rapid shift

Staff writer

Now is an uncertain time for stock and bond investments, with markets having plunged the first quarter of the year.

Financial advisers, though, are encouraging clients to think before making major changes to their accounts.

Dan Shurley, regional financial consultant for Farm Bureau, said whether to make changes is an individually-driven decision.

“As an adviser, you have to put them in a place that’s suitable for them,” Shurley said. “For some people, their goal is to not lose money. That brings in a strategy that would be conservative, like a fixed account.”

Some investors want to stay with higher-risk markets that might respond to market upswings sooner than more conservative investments.

“It depends on the person,” Shurley said.

He encourages people to be aware of what’s happening in the market by keeping tabs on how their investments are doing. That’s easier to do than it used to be, because people can log on to their account online and see what’s happening before getting their quarterly statement.

When stock markets took a dive during the first quarter, it was very eye-opening for most people because it was a severe swing in the market, Shurley said.

“I say look into it daily,” he said. “To foreshadow what will occur, I’d say that’s impossible at this point. With the market as a whole, some markets are doing well while others are down.”

Shurley said there isn’t a quick fix right now, and the markets will see some adjustment over time.

“I think it will take a longer period of time for that to level itself out,” he said.

Chris Hernandez, financial adviser with Edward Jones in Marion, said he’s not gotten a lot of panic calls from clients.

“Most clients seem to be patient,” Hernandez said. “We’re very blessed to have lots of clients who understand markets and understand risks.”

As an overall view, Hernandez said he wants people to rebalance their portfolios and continue to invest if they are able to.

When equities fall in value, bond values tend to go up. Moving investments into bonds can take up some of the market shift, he said.

“We are calling clients,” Hernandez said. “We are proactively reaching out to clients, explaining to them what they need to do now. We’re here every day to answer them and take their calls.”

Don Noller, president of Marion National Bank, said the bank offers savings accounts and certificates of deposits, but with the market crash, rates are not high. Bond rates went up during this past quarter, but then dropped.

“Most people buy stocks where they’re low and bonds when they’re high,” Noller said.

Times when investments are shifting rapidly are not times to tweak investments, he said. Values will depend on whether market shifts go away or if values come back sporadically, he said.

During the last recession, most investors got their values back within three or four years, Noller said.

Last modified May 7, 2020

 

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