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DANA PARSONS / ORANGE COUNTY

Queries add up about the meltdown

September 16, 2008|Dana Parsons

Like anyone with money in the stock market, I reacted to Monday's financial news with palpitations, needless lashing out at friends, excessive intake of chocolate items and repeated cries of "Why me?"

In the late afternoon, after the market closed with its 500-point drop officially in the books, I phoned Phil Faubert, my financial advisor and owner of Pacific Wealth Partners in Newport Beach. When Wall Street makes me tense, he calms me. When I tell him I'll be living in a box under the freeway someday, he dabs my forehead with a damp cloth. Best of all, he always takes my calls.

Once on the phone with him, I probably should first have asked how he was doing, but I decided to get right to it.

Me: How doomed am I?

Phil: How doomed are you?

(Right away, I didn't like that he chose to repeat the question.)

Phil: After today, it's kind of hard to say. At your stage, I don't think you're doomed at all. Stay the course we charted and realize why we've chosen the investments we've chosen. We picked good-quality places to put your money and we have to stick by those.

Me: But wasn't today unsettling to you?

Phil: Today was very unsettling, as a matter of fact. In the past, we've had conversations and I've been optimistic, which I still am. But seeing a company like Lehman Bros., which has been around for well over a century, going bankrupt and seeing Merrill Lynch being purchased by Bank of America and seeing a large insurance carrier [in trouble], it definitely creates hesitation for this exact moment in time.

Me: That's not what I want to hear.

Phil: But there are silver linings. Oil prices are down to $94, $95 a barrel. That's a good thing, it's going to impact consumer confidence.

Me: Should I jump off our building?

Phil: Don't jump. Break a leg, you might feel better after that. The bottom line is nobody knows how bad it is. That's the problem. That's why we saw a 500-point dip today, because no one knows.

Me: Give me something to go on.

Phil: I think this market is be poised for a recovery within six to 12 months.

Me: Are you just saying that?

Phil: I'm not just saying that. I've got my money, my mom's money, my dad's money, my in-laws' money, my kids' money in.

Me: Why shouldn't my money be under my mattress now?

Phil: My mom asked me that same question today. And I said, 'No, not all of it.' It's not a bad idea with the banks doing what they're doing. I have confidence in our financial health as a whole, especially over the long term, but over the short term, it's anybody's guess.

Me: Do you have a handle on what's going on? Seems like things are lurching around.

Phil: That's really where it is. I think your underlying question I'm hearing is, 'Do I have a handle on this?' No. No one does. If anyone tells you he has a handle on this market, this economy, this world economy, as of where we are on Sept. 15, he is an absolute liar. But do I believe, based on fundamentals, that things are going to get better? Yes. Absolutely.

Me: Will I be working for the rest of my life?

Phil: If you want to.

Me: Let's assume I don't want to.

Phil: Then, no, I don't think you'll have to.

Me: Is the country collapsing?

Phil: That's a pretty big question. I don't think so, but we are going through a very, very challenging time on every level -- politically, geopolitically, economically, environmentally. A lot of different things are coming into play now.

Me: Tell me again why I got in the stock market.

Phil: You're in the market because it has historically been one of the best personal investment vehicles in history.

Me: Are we in a new world order?

Phil: I think we probably are on certain levels. Today was history made. We saw one of the biggest firms in history collapse.

So, is there a new face? Absolutely. New rules? Absolutely, no question about it. Are they going to change things for the better? I believe they are.

Me: Should l feel good after this call?

Phil: No, probably not. If you feel good after what's going on right now, you've got your head in the sand.

Today was tough. But in the next 12 months, yes. For me personally, today was a very, very draining day.

Me: One last thing. Have you started drinking yet today?

Phil: Not yet. I'm probably going to opt out of drinking today and go to the gym instead.

--

Dana Parsons' column appears Tuesdays and Fridays. He can be reached at (714) 966-7821 or at dana.parsons@latimes.com.

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