Everywhere he goes, people ask Rodger Lindenfelser, professor of business and economics at the Community College of Allegheny County, about the economy and what it means for them.
“People are concerned,” he said, “and rightfully so.”
Within the past week, the Dow Jones Industrial Average stock market index dropped 600-plus points Monday, gained more than 400 points Tuesday and dipped back down Wednesday. As of Thursday morning, stocks were climbing.
Monday was the first day of trading since Standard & Poor’s, a U.S.-based financial company and credit rating agency, downgraded its long-term credit rating of the U.S. from AAA to AA+, a change which led to questions about how the market would play out this week and how that would impact individuals.
David Trafican, sales manager with the Monroeville office of Western and Southern Financial Group, said questions from his clients focus on what kind of guarantees can be offered when it comes to their retirement, family and business.
“I always encourage people that I work with every day to sit down with a trustworthy advocate of the industry,” Trafican, an Oakmont resident, said.
Western and Southern is a Fortune 500 company.
While he said that one can’t make recommendations without knowing the full picture of someone’s situation, Trafican would encourage people to sit down with someone they trust, lay out their options and not panic.
“You should never make a rash decision,” he said, “especially with money that you have worked an entire lifetime to accumulate.”
Trafican said investors should work with someone who will show the worst case scenarios and do more listening than speaking.
“That is a direct indication they are listening to your specific needs and designing a specific solution for your family,” he said.
Working with someone who understands a client’s concerns is key, especially in the face of uncertainty.
“It is extremely important for financial professionals to discuss and address the impact these scenarios can have on their clients' retirement expectations," Chris Zozula said.
Zozula, a Plum Borough resident, is a financial specialist with Nationwide Securities LLC out of White Oak. He is also on the board of the Plum Chamber of Commerce.
Those approaching retirement or already in retirement can be significantly affected by market downturns, he said.
"People entering or nearing retirement are concerned about maintaining their income level," Zozula said.
Zozula suggests investors find someone they are comfortable working with and make clear what expectations they have of a financial professional.
“We work closely with our clients to make sure recommendations are suitable for their specific financial needs,” he said. "You can't make the same kind of recommendations for everybody.”
Lindenfelser, who teaches at CCAC’s South Campus in West Mifflin, said in economic situations like the present, there are winners, losers and those who break even.
Those nearing retirement, he said, might not be able to retire when they wanted to because of losses in retirement accounts.
Some with job security, like those in unions and recession-proof professions, and middle class people “who essentially fall below the radar” will break even, according to Lindenfelser.
“There are people who don’t have investments,” he said. “They’re pretty good.”
People have to change their spending patterns, he added.
“Right now the best thing people can do is protect themselves financially,” he said. “People just have to think through their future.”