Is Today A Good Day To Invest?

After one of the worst weeks on Wall Street, stocks are trading higher. But Nancy Marshall-Genzer of Marketplace says experts suggest investing steadily — not going on a buying spree. In other words, don't sell or buy in a panic.

ALEX CHADWICK, host:

From NPR News, it's Day to Day. It's too late. Stocks already are headed back up. You missed it. Marketplace's Nancy Marshall-Genzer is with us. Nancy, are financial advisers really telling their clients to get back in now?

NANCY MARSHALL-GENZER: Right, Alex, you blinked. You missed it. Actually, this may sound counter-intuitive, but they're saying, no, don't jump into the market today. They're saying, avoid a herd mentality, whether it's a herd of bulls or bears.

And they also say you shouldn't try to time the market, because individual investors, unfortunately, have a knack for getting it wrong, that is buying high and selling low. Mark Skousen is an economist who is now editor of Forecasts and Strategies newsletter. He is telling investors to just be patient.

Mr. MARK SKOUSEN (Editor, Forecast and Strategist): They shouldn't panic sell, or nor should they panic buy. When you panic buy, sometimes you can overpay and when you panic sell, you don't get a good deal.

MARSHALL-GENZER: And Skousen isn't telling investors to actually stay out of the market all together. He's just saying, keep putting your money into the market steadily. Keep up your regular contributions to your 401K plan, Alex, but don't go on a stock-buying spree.

CHADWICK: OK. Is it possible to detect any change in the mood of investors?

MARSHALL-GENZER: Well, Alex, you're going to hate this. But Skousen says some investors are cautiously optimistic, sorry about the cliché, but he says it does fit. But still, he says, investors are very cautious.

They're skittish, because they're waiting to see if and when the economy improves. They're also waiting for the results of the presidential election. They want to see if the next President changes tax policies on investment. Specifically, they're waiting to see if taxes go up on dividends and capital gains.

CHADWICK: And what about the other major player here in our financial well-being, the consumer. It's Columbus Day, are people out buying, whatever you buy on Columbus day, washing machines, or TVs, or I don't know?

MARSHALL-GENZER: Flat screen TVs. Happy Columbus Day, Alex. Of course, consumers are key, but they don't seem to be going out and spending. And of course, consumer spending is a big driver of the economy. That's spending is tapering off. Pat Dorsey is Morningstar's Director of Equity Research, and he told me investors shouldn't assume that consumer spending is going to pick up.

Mr. PAT DORSEY (Director, Morningstar Equity Research): Betting on a big rebound in consumer confidence, betting on a big rebound in consumer-related stocks, there are probably safer ways with a better risk reward to invest at this point.

MARSHALL-GENZER: And Dorsey says consumers are feeling poor, because the value of their houses is going down, and they're afraid they might lose their jobs.

CHADWICK: You know, I found myself as bewildered as ever about investment advice at this point. So, get in, or get out, or do nothing?

MARSHALL-GENZER: Just keep contributing to your 401K, Alex. There's just so much uncertainty out there. And economists remind me that we are still either actually in a recession right now, or headed in that direction.

CHADWICK: Nancy Marshall-Genzer, Happy Columbus Day, and thank you to public radio's daily business show, Marketplace.

(Soundbite of music)

CHADWICK: And there's more to come on Day to Day.

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