DOWNTOWN — The past week has been a roller coaster ride for the New York Stock Exchange. The Dow Jones Average experienced a 513 point drop last Thursday, the furthest it had plunged since October 2008.

In the days following, the market continued to buckle back and forth, the most drastic change when the S&P downgraded the United States’ credit rating on Monday and the Dow fell below 11,000 points. Thursday and Friday the market rose slowly, closing at 11,261.98 points on Friday.

In the face of the rapidly changing market local investment and financial advisers are mixed on strategies for their clientele.

Some feel that the stock market’s behavior is too volatile, a clear indicator that investors should leave the market and stay put for a while.

Others say that it’s a good time to stay pat, but it’s no excuse to leave the market.

David Wright is managing director at Sierra Investment Management in Santa Monica, a group that handles money for retirees and other conservative investors across the country.

Sierra’s cautious approach, designed to help investors make money without great risk, means that their strategy has remained constant for the past year, although the firm has reacted to the falling stock market in the past two weeks by investing more heavily in preferred stocks and AAA bonds.

“This is part of our defensive discipline that keeps our volatility low,” Wright said.

This contrasts with a more aggressive strategy the company used in mid-2009, he added.

Some advisors think that a deflated market is the perfect time to get in because prices are low, allowing investors to find great deals on good companies.

“Stocks overreact to the news, and for patient investors, it’s a good buy,” said Michael Femino, portfolio manager for New Economy Capital on Broadway.

Femino knows that his position on investment is contrary to some strategies, but feels that dips in the market are good opportunities for smart investors.

“The last couple weeks, when you see a panic situation, it’s usually the best time to put new cash to work,” he added.

Femino said that local businesses will naturally react to the stock market. Retail businesses and restaurants in areas like the Third Street Promenade and Montana Avenue might have to offer more discounts as consumers become more selective about how they spend their money.

“They’re not going to blow a hundred bucks on their lunch,” he said.

A salesperson at Barney’s CO-OP at Santa Monica Place said that since the stock market crashed she noticed her and her co-workers’ hours were cut back.

Local financial advisor Michael Rosen believes that smaller stores will be hurt as consumers tighten their wallets and turn to larger chains.

“You already see it, people who would never go into a Target are going to Target,” he said.

Rosen said that this conservative attitude can creep into the way that people will invest in the market.

“From the individual investor point of view, they get scared,” he said.

Some local investors, who have grown wary of the stock market, suggest investing in commodities and foreign markets and currency.

Carl Lambert with the Action Apartment Association said that real estate might provide a safe haven for investors tired of a skittish stock market, but in the end, it’s all connected.

“The psychology of the stock market impacts investors in all areas,” he said.

Financial advisors seem to agree that the market’s behavior is cyclical, and it will rise again.

The question is when, and that is something that nobody knows. They’re going to have to wait and see.

news@www.smdp.com

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