By Jill Nagy
“It’s a dangerous place to go it alone,” Glens Falls financial advisor Don Tenne says of the current investment environment.
“The old days when you could throw your money into an indexed fund and come back in 10 years and see it doubled are gone,” he said. Daniel Hazewski Jr., another Glens Falls financial advisor, agreed that finding an entry point for investing today is difficult.
“The biggest trend,” Hazewski said, “is that interest rates are as low as we have ever seen them and the stock market is as high as we have ever seen and we don’t know when the market will pull back.”
Both caution that, if someone is going to invest, they should think long term, at least three to five years, according to Hazewski. “Shorter term, stay in cash and take your lumps,” he advised.
Said Tenne, “If you need your money back in six to 12 months, use a bank.”
Tenne sees the recession that began in 2008 as largely the result of a credit problem. People unable to borrow money needed cash.
“Everybody needed money, so everything went down,” he said. In addition, “the Federal Reserve has been printing money to artificially reduce interest rates. It’s making people leave bonds and buy stocks,” thus the rapidly rising stock market. “It’s not so much that the stocks look so good as that the alternatives look so bad.”
Hazewski sees a very risky market, at least in the short term.
“You want to go into the market long term,” he said. “Buy consistently or hold onto what you have.”
As an alternative to stocks, he said the real estate market coming back. On the other hand, “you’ve seen gold retreat and we don’t know what will be next.”
“A lot of old rules are being questioned; the environment is very different than it has been before,” Tenne said. He gave as an example: In the last 40 years, interest rates have been gradually coming down. Now, they seem to have hit bottom and are starting to go up again.
Tenne cautioned, “Don’t put all you money in any one thing,” but rather identify risk tolerance (How much can you afford to lose?). And look at the time horizon (When will you need the money?).
Perhaps most important, said Tenne, is pay attention to what is going on and work with a professional who keeps in touch. “I don’t know of any time when it was so important to pay attention.”
Both advisors emphasize the need to diversify and to be realistic. Hazewski said he gets “a lot of calls from people asking,’How can I make more money?'”
Tenne said he get calls from people looking for “a high return with no risk.” Both are adamant about the need to have a healthy respect for the risk involved in any investment that promises more than a nominal return.
Tenne, who heads the Tenne Financial Group, part of the MetLife office in Glens Falls, and was MetLife’s Financial Planner of the Year in 2011 and 2012, emphasizes the need for “full, comprehensive financial planning” and working with a financial planner who will “hold you accountable to follow your plan.” He said that he meets at least quarterly with his clients and tries to keep them focused on their financial goals.
He also noted that “investing in stocks is totally counter-intuitive.” He said if a person walked into a store and found a sweater on sale at half price, would they go away and come back later to buy it when it was no longer on sale? Yet, when stocks were down by 50 percent, effectively on sale, no one wanted to buy them. Now that they are going up, people are getting interested again.
Tenne said many experts expect the rising market to continue for another six months or more. “It may be artificial but, if you pay attention, you can participate,” he said, with the emphasis on paying attention.
“You have to look around and ask, ‘How do I mitigate risk?'” Hazewski said, noting that even in times less perilous than the present, there are normal cycles causing prices to rise and fall. Hazewski and his father, Dan Hazewski, Sr., are in practice as Legacy Planning Partners at 510 Glen St. in downtown Glens Falls. His telephone number is 798-6688.
Tenne’s office is on the first floor of the Travelers Building at 333 Glen St., also in downtown Glens Falls. His telephone number is 792-6566, Ext. 33.