INSIDE:
A New Mold
Of Sports Agent
93
Trying To Embrace
Her Heritage
94
Waving Mideast
Olive Branch
96
Elyse Essick: "How much risk can you take?"
Financial
advisers
look at
the
long hau
"Nothing happens overnight. We
keep telling people that government
T-bills have been paying 3.5 percent
for the last 75 years. Bonds are pay-
ing 5.5 percent, and stocks average
11 percent. And with the help of pro-
fessional money managers, you can
pick up an extra 2-3 percent," said
Jaffa.
But Jaffa stresses that investors need
to own quality.
"You've got to learn how to take
advance of the tax laws, and how to
take advantage of inflation. Above all,
what was good yesterday may not be
tomorrow.
"There was a time 35-40 years ago
that people could buy a stock and put
it away in a safety deposit box and
that was their future. You can't just
do that anymore. You need to have a
living plan, you need estate planning.
"It is a buying opportunity out
there today," said Jaffa. "Remember,
negatives often turn out to be posi-
tives."
Performance
ALAN AB RAIvl S
Special to the Jewish News
D
espite market upswings
and downswings, David
A. Jaffa of Financial
Network in Farmington
Hills is highly optimistic.
He tells investors, "The issue is,
what is their age? What is their
income? What is their tax bracket?
And what are their goals?"
"The economy gets sick," says Jaffa,
and the economy gets better. People
get sick. People get better. And sci-
ence marches on.' Coca Cola is not
going out of business," he adds.
Jaffa believes the key to financial suc-
cess is asset allocation, whether you are
a large, medium or small investor.
"People may have too much in one sec-
tor, and not enough in others. They
may have too much in growth or need
more value. It is a question of becom-
ing rebalanced," Jaffa tells clients.
"Utilities, financial, energy, phar-
maceuticals — they all did well in
2000. But if you were in the Janus
Fund, and you were in the technology
and growth market, you may have
suffered some losses," he concedes.
"But nothing has really changed.
Ninety-nine percent of the people
who come to see us don't know how
to manage their money. They want to
have fun, they want to travel, and
they want to help their children. But
what they really need to do is review
their portfolio on a regular basis with
a professional.
Elyse Essick, chief marketing officer
of the Munder Group in
Birmingham, will remember 2000 for
what happened in the technology and
Internet markets.
"We came to a slow realization that
for many of the younger, newer com-
panies, earnings expectations were not
going to be met. That was the begin-
ning of their great fall from grace.
Look at the NASDAQ. In addition to
the earnings growth slowdown, pro-
ductivity gains did not offset cost
pressure," she said.
This year, the bad news has been
coupled with news of layoffs. "It all
points to being tougher for compa-
nies to be successful in the year
ahead. Certainly, they are getting
help, based upon the Fed (Federal
Reserve Board) being more accom-
modating. The Fed is committed to
cushioning a slowdown and thus
relieVing industrial anxiety," said
Essick.
She points out that mutual fund
cash is at its highest level in two
years. That's one reason she believes
there is now great pressure on compa-
nies to perform.
"Selecting has become more impor-
tant than it has been in years. No
longer can you afford to buy solely on
the basis of a good story. Now it is
important for companies to be able to
deliver the goods," said Essick.
She believes there are many viable
tech stocks out there that had been
out of the average investor's price
range for a while. So Essick advises
her clients that this is a good time to
buy. "The big question you have to
answer is how much risk can I really
take?"
Murray Yolles of Yolles Investment
Management Inc. in Southfield has a
different perspective.
"We have continually reminded our
clients that they are saving for retire-
ment. Most of them are over 55 and
are about to retire or are retired.
"So we remind them of the philoso-
phy of long-term investing and not to
get carried away with short-term,"
said Yolles, author with his son,
Ronald, of the recently published
Getting Started on Retirement
Investing.
"Forecasting what will occur over
the next six to 12 months is not a
useful thing to try. Every January, the
New York Times, the Wall Street
Journal, Forbes, Money, they all go to
the top people around and ask them
what their forecast is for the next
year. Then in June or July, they
decide to see how the forecasters are
doing. And their results are all over
the place.
"That's why we emphasize long-
term strategies and diversification. We
tell our clients, 'Don't get too down if
things are going badly in the market,
or get too elated if things are going
well," said Yolles.
4/20
2001
91