 
|
|||||||||||||
              
|
Investing: Firms see former do-it-yourselfers seeking help
Sunday, March 25, 2001 By Len Boselovic, Post-Gazette Staff Writer
Before the decided turn of events on Wall Street last year, making money was something any investor -- maybe "blind pig" would be a better term -- with an online trading account could do. Now that the going has gotten much tougher, the region's investment firms are looking forward to a solid year.
"Many people thought investing was easy. They had developed a confidence that maybe they could do it on their own," said Carrie Coghill, president of D.B. Root & Co., Downtown.
Coghill has been with the investment advisory firm for 15 years, and she said last year was the slowest business had ever been. But it picked up quickly this year once investors took a look at their year-end account statements.
"After last year, people are saying: 'I can't do this by myself anymore. I need some help,'" she said.
Investor angst has sharpened the focus on long-term investing instead of trying to get a piece of the week's hottest initial public offering. The collapse of technology stocks not only shattered the confidence of inexperienced investors, but it also made them consider options they wouldn't have given the time of day.
"There was a time about a year and a half ago when you couldn't beg anybody to buy a fixed income investment," said Tony Fadool, senior vice president and chief sales strategist for Federated Investors.
The flight to money market accounts, bonds and other stodgy but stable investment products plays into one of Federated's greatest strengths. Four days into the New Year, cash in Federated-managed money market funds topped $100 billion. Overall assets under Federated's management increased 12 percent last year to $139.6 billion.
All over town, people have a new found respect for diversification, asset allocation and risk.
"People found out what volatility really means, especially downside volatility," said Legend Financial Advisors President Louis Stanasolovich.
The North Hills firm also is seeing an influx of do-it-yourselfers who have decided they need professional help.
"Many of them weren't diversified or thought they were diversified by holding five large-cap growth funds," he said. "People have had a lesson much like they had in 1973-74."
Robert Fragasso, president of The Fragasso Group, said the Downtown investment management firm's reliance on asset allocation and avoidance of high-price stocks of unprofitable start-up companies served clients well last year. While such a disciplined approach to investing may be a novel concept for the market's latest victims, "It's always been an easy concept for people who are reasonable," Fragasso said.
"Every generation has to learn the lesson again, and hopefully it just happened," he added.
Federated's Fadool believes the interest in value stocks -- shares whose price doesn't reflect the value of the business -- should be in vogue for some time "because it's been so out of style for the last couple of years."
One big item on Federated's agenda this year is completing the $200 million acquisition of the Kaufmann Fund, a $3.4 billion growth fund.
Depending on revenue growth over the next six years, the deal could cost Federated an additional $120 million to $220 million. The purchase reflects Federated's desire to beef up the equity fund portion of its offerings.
"It adds a brand new dimension to Federated's management style," Fadool said.
Not everyone is suffering through the death spiral of last year's high-flying stocks.
"When you have a long-term focus and try to keep your clients balanced and diversified ... then you pay somewhat less attention to the volatility of the market," said Robert Kampmeinert, Parker/Hunter chairman and chief executive.
Kampmeinert says the Downtown investment firm had a record year last year and expected more of the same in 2001.
Its conservative investment style served a lot of clients well during last year's unpleasantness.
"They're thanking us today," he said. "We don't remind them or bring it up, but they know."
One of Parker/Hunter's biggest challenges has been finding qualified employees to serve its growing customer base.
Kampmeinert expects to add about a dozen employees this year to the firm's 309-person staff, including two research analysts.
"We are trying to bring greater coverage to more industries," he said.
|
||||||||||||
