Bear market produces its own fear factor


The stock market, for a variety reasons, has continued to find itself stuck in a state of instability, which has rippled from New York City to Craig.

"We had very few people who owned Enron," said Edward Jones Investment Representative Dean Brosious. "But we had a few who owned WorldCom, and some sold their positions, and some held on."

Brosious said the stock market's current condition is, as always, a direct consequence of recent developments.

"It's a combination of things," Brosious said. "We're struggling with having trust in corporate management and also with accounting issues and economic issues. Those are the things we hear most often."

Brosious said the current "bear market" situation is a long-term, downward trend characterized by atypical intermediate lows mixed with lower intermediate highs.

By definition, a bear market is marked by at least a 15 percent decline in the Dow Jones Industrials, the S & P 500 Index and the NASDAQ.

Brosious said he understands investor apprehension after the recent developments throughout the national business community.

"We don't want to make light of the problems that have occurred, but we need to keep it in perspective. We don't think it is an entirely corrupt situation for the bulk of the companies out there. We're telling our clients there are over 14,000 companies you can invest in, and we've seen only two or three companies affected."

Brosious said this is a time for investors to practice patience, not fear.

"We are looking at a fairly normal phase of concern," he said. "Bear markets usually generate fear. But investing is not as simple as buying when you feel good and selling when you feel bad. And during bear markets, the market seems to trade too much on emotions, and not enough on fundamentals."

Cory Leiker, owner ACCU-Comp/Cory Leiker Accounting, said she has seen a similar problem.

"Mostly what I've seen is fear and a lack of trust from clients," Leiker said. "The market has been down, and there is a lack of confidence."

Brosious said despite the turmoil there are good reasons to still invest.

"We're constantly asked when things are going to turn around, and the answer is we don't know," Brosious said. "If people do have additional money to invest, this is still a good time to systematically invest.

Leiker said there are several other investment options than just the stock market.

"It might be safer to change riskier investments into safer investments, like money markets, interest-baring saving accounts and CDs," Leiker said. "You won't be able to expect a lot of growth, but you don't have to worry about loss either."

Brosious said people who currently have holdings should refrain from impulsive trading.

"If people have good securities and they are well diversified, they should stay put," he said.

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