Stock plunge throws scare into some local investors

Brian Bixby, 50, has been working as a dealer at Caesar's Palace for 19 years helping people place bets with big wads of money. Yet, he said he didn't decide what to do with the money he stashed in his company 401(k) retirement program until it was too late.

"The last couple of weeks, we thought about pulling all my money (from stock funds) and putting it in bonds," Bixby said.

Now, he figures he has to leave it in stock funds, half in foreign stock and half in domestic stock funds, in order to recover the money he has lost.

"I haven't even looked at (401(k) balances)," Bixby said. "I'm afraid to look at it."

Las Vegas area investment advisers generally recommend the approach that Bixby is taking.

Advisers said many local investors were panicking Monday as the Dow Jones Industrial Average plunged by 800 points before recovering to a 370 point loss.

A spokesman for Charles Schwab apologized that the manager of its Henderson brokerage office couldn't take time to comment for the newspaper.

"They are just slammed today" with a flood of customer inquiries, said a spokeswoman.

On the other hand, "we haven't had any real panic," said Annette Barnes, director of operations at Danielson Financial Group. "There are some concerns, of course."

John Futrell, president of Futrell Financial Management, said his firm didn't receive any calls from panicked investors on Monday but only because he called them last week to reassure them and warn them to expect market volatility.

"Anybody who didn't see this coming was clueless, because the housing market was just a joke," said Elizabeth Meinhold, a chartered financial consultant with MML Investors. She was referring to the housing bubble and the credit crisis that started with subprime residential mortgages.

Meinhold said most clients near retirement should refrain from new stock investments, because they may not have time to wait for the market to recover.

"For my younger clients, this is a golden opportunity," she said. "You're getting everything on sale."

When investors call, "I just remind them that usually, almost always, it's a mistake to sell into a panic," said Art Chevalier, a financial adviser with Nations Investment Associates.

When stocks tumble, Chevalier tells his clients that there are always investors looking to buy stocks based on the belief that stock prices will rebound. But most investors wait to jump back into the market has recovered 15 percent to 20 percent and most of the gains have already been made, he said.

"Mostly people are holding on," Chevaliier said.

Reed Radosevich, president of Northern Trust Bank in Nevada, recommends that clients with an investment horizon of 10 to 15 years or more continue holding their stocks.

Others should trim their stock holdings on days when the stock market is rallying, rather than sell on down days, he said.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.