Meet the Street: Investing in Uncertain Times

The year 2001 is shaping up to be a year of the unexpected. We've seen several large declines and smaller rallies in the market, and are now facing an indefinite period of unprecedented uncertainty at home and abroad following the events of Sept. 11.

Jordan Heller Vice President, Financial and Estate Planning, American Economic Planning Group

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To get back to basics and to find out how investors can examine and adjust investment goals and expectations, Meet the Street turned to Jordan Heller, a financial planner and vice president at the American Economic Planning Group in Watchung, N.J.

Heller starts his clients off with defining their financial and investment objectives by their time horizons and risk tolerance among other key factors. He tells us how to formulate an investment approach that takes into account these elements. Staying on course and participating broadly, yet fully, in equities is important for long-term investors, he says, regardless of short-term jitters. While the current economic conditions warrant concern, he's optimistic about the future, especially about the positive impact of increasing globalization.

TSC: What do you think is the first step in pulling one's financial life together in these confusing times?

Heller: The most important thing for the individual investor right now is to define his or her objectives: Is it retirement? Is a special event coming up? Is it for education for yourself or your children down the line?

Each objective will be funded and invested in different ways. For example, if capital is needed within the next five years, you really shouldn't be in the equity market at all because you need a fixed amount of money, which must be there when the occasion arises. Therefore, you don't want to take on the volatility of the equity market. You would be better served with a fixed income-oriented investment approach.

TSC: What would be examples of that?

Heller: Munis , intermediate- to shorter-term bonds, high-yielding shorter-term bonds such as the (STADX Quote)Strong Advantage fund. But make sure the principal is safe because that is more important in this case than what you make above it. Still, you need to make above the inflation rate to keep your purchasing power.

TSC: What kinds of funds would you recommend right now? ...