As the economic earthquake hit Wall Street this week, crumbling giants like Lehman Brothers and American International Group, Ashland's streets felt the tremors, financial experts said Thursday.
As the economic earthquake hit Wall Street last week, crumbling giants like Lehman Brothers and American International Group, Ashland's streets felt the tremors, financial experts said Thursday.
"What's happening on a national level is affecting the amount of investment capital that's out there, and the way it trickles down can result in business not being able to get the finances they need to get through tough times or to be able to expand," said Mara Van Heuit, a certified public accountant who owns Ashland Financial Solutions.
Van Heuit said she's been on the phone with nervous investors for much of this week.
"This week in particular has really shaken clients. They're really looking for reassurance and some sort of explanation on what's happening."
Van Heuit's recommending that her clients hold on to their investments, as long as their portfolios are adequately diversified. She advises investing in both foreign and national securities and in both large and small companies to decrease chances of large losses.
"We're just sitting tight on investments. It would probably be a bad time to sell and lock in these losses," she said.
Doug Turner, a financial advisor at Edward Jones on Washington Street, is also advising his clients to hang on to investments and ride out the stock market slump.
"I guess the important thing that I'd have to communicate is for everyone to keep focused on what their longer-range financial goals are and not be swept up by the day-to-day headlines. It's important to try to keep your emotions out of the equation," he said.
Turner doesn't think the fallout from the Wall Street shake-up will be as drastic as some newspaper and television analysts are predicting, he said.
"It will effect everyone on a short-term basis, but I believe we have had similar market corrections in the past. We did have the savings and loan crisis in the late 1980s and early 1990s and that was similar in some ways to financially what's going on right now."
Van Heuit, however, sees last week's events as unique and troubling, she said.
"Certain things are happening now that I've never seen before. It is very concerning, especially as we're heading into an election and we'll have the passing as torch to another administration. We want to make sure the administration coming in is going to be making prudent economic decisions," she said.
Van Heuit said local workers could see layoffs as struggling companies trim back spending. She recommends people have at least a three-month cash reserve in case they unexpectedly lose their jobs.
She also foresees higher taxes in coming years to make up government reserves that are being used to bail out companies and stimulate the economy.
"I think that (the federal government is) doing a very good job in terms of putting in place emergency measures to protect the economy; but all of this is costing money so I think we're going to see higher taxes down the line," Van Heuit said.
She expects stocks to fall even more before they rise.
"So far we're having kind of an inevitable fallout from a lot of excesses of the past and a lot of deregulation that may have gone too far. I do think things will eventually stabilize but I don't think that's going to happen yet. We're not out of the woods yet."
In order to forget about the financial forest, Turner recommends his clients enter a real one.
"After you've reviewed your portfolio, go take a nice, long hike in the woods and relax," he said.