Lynn area financial planners urge against hasty decisions

LYNNBy Sean LeonardThe Daily ItemWith the huge sell off on Wall Street on Monday in the wake of Standard & Poor’s move to downgrade America’s bond rating, Lynn area financial planners are urging investors against knee-jerk portfolio decisions based on panic.Rather, those interviewed on Tuesday, when the market closed up 429.92 points, said they’re confident the downturn was politically driven rather than a true reflection of the economy.They urged clients to ride out the storm, while those with money to invest may find great opportunity.Mark Singer, certified financial planner with Safe Harbor Retirement Planning, 152 Lynnway, said investors are nervous about how the crisis might affect their retirement plan.”People are thinking out loud with emotions firmly on their sleeves, that, ?Oh my gosh, we’ll never be able to retire,'” Singer said. “When the market gets in turmoil like this it really impacts us.”Should people be selling right now? The question becomes whether they set up their risk management properly to begin with,” he said. “People need to know what number they need to retire and most people don’t know what that number is.”As a result, he said, “Some take on more risk than they should, therefore lose more than they should in times like this.”Investors should use this as an opportunity to review exactly where they are and if it’s necessary to make changes with their level of risk,” Singer said, cautioning, however, that those who have taken a hit in stocks this week should not immediately sell and effectively lock in their loss.Singer said he expects market volatility for several years.”We’re in uncharted waters; we’ve never seen a downgrade like this before,” he said. “The expectation is for a flat market. Nobody should be investing for a week or a month of a year; people need to assess where they want to be in three-to-five year periods.”Former Lynn Mayor Albert DiVirgilio Sr., president of DiVirgilio Financial Services, 270 Broadway, Lynn, said, “We anticipated (a market slide) would happen because of what’s going on in D.C., and a week-and-half ago we emailed our client base advising them they might want to consider putting investment into a money market.”Some, he said, took that advice n moving their money into annuities that guarantee principal and yield a slightly higher interest rate than savings accounts n and avoided steep losses in the stock market. Others, he said, should ride out the market.”I don’t think this downturn is going to be anything like 2002 or 2008. I don’t believe we’re headed for another recession,” DiVirgilio said. “What’s happening is a direct result of the political infighting in Washington.He added, “I am very discouraged (with elected officials) in Washington. It’s become all about getting re-elected and not about doing what’s right for the country. The only pledge (members of Congress) should take is the Pledge of Allegiance, and to do what’s right for the country.”DiVirgilio said those who have lost money in stocks over the past month should know that if they sell when the market is low, they can only write off up to $3,000 of the loss on their federal income tax.”People should ride this out, even at my age,” he said. “I’m positive (the market) is going to get better.”While most investors of average means, he said, are safest today in guaranteed annuities, he said those who have more than a half-million in assets might “take a look at some stocks that have been beaten” during the crisis as opportunity.”Bank of America probably won’t come back next month, but if you buy Bank of America today at $7 (per share) and in three years it’s back up to $30 or $45, you’re better than quadrupling your investment,” he said. “I wouldn’t tell everyone to go ahead and do something like this. It all depends on your individual circumstances.”Marc Freedman, of Freedman Financial in Peabody took a moment from an industry convention in Chicago to discuss the crisis with The Item in a telephone interview T