Advisers suggest slowed investing Shake-ups on Wall St. bring jitters to Valley

By Don Shilling

The caution light is flashing on Wall Street.

Two area investment advisers suggest a wait-and-see approach after Wall Street suffered its worst loss since the first day of trading following Sept. 11. It’s best to sit back and see if the market has reached bottom, they said.

The Dow Jones industrial average lost more than 500 points, or 4 percent, Monday on news that the shake-up in the financial sector is continuing. One major investment bank — Lehman Brothers — filed for bankruptcy, while another — Merrill Lynch — was acquired by Bank of America. Plus, American International Group — a major insurance company known as AIG — needs emergency funding.

Investors have one big question, said Michael Creatore of Creatore Wealth Management in Boardman: Who is the next victim of the nation’s credit crisis?

Though the question goes unanswered, he’s telling clients that it may be time to put more money in bonds and less in stocks.

He isn’t advising pulling out of the market and putting money somewhere with little risk, such as money market accounts. Stock markets could snap back, and investors don’t want to miss the gain in values, Creatore said.

Once a bottom is set for this market downturn, investors will be able to find good companies at bargain prices, he said.

John Moore, branch manager of the Boardman office of Stifel Nicolaus & Co. in Boardman, said he thinks it’s a good time to keep some money in cash investments instead of stocks. That way, investors can see which way the market is moving.

“We’re still in limbo here,” he said.

The Dow was trading at more than 14,000 two years ago but a steady decline put it under 11,000 this past July. It started to rise again, but Monday’s drop wiped out those gains. The Dow closed at 10,917 Monday.

Moore said, however, that the market still has another bull run in store — eventually.

“We always go higher. This is America,” he said. “We just don’t know how long it’s going to take us.”

shilling@vindy.com