Adviser says now is the time for action

John Lumbard has some advice for investors: Don’t close your eyes and ignore those grim financial statements. And don’t sell everything and hide the proceeds under the mattress.

“Now’s the time to rebuild,” said Lumbard, a partner in Hollis-based Lumbard Investment Counseling.

He recently spoke at a men’s group breakfast at the Hunt Community, the second straight year the Chartered Financial Analyst has given a talk at the retirement community.

“The men in the room at the Hunt have seen this before. They lived through the Great Depression,” Lumbard said. “Most of them kept their wariness. They’ve been more frugal than the younger generation, less willing to take risks.”

That didn’t mean Lumbard’s audience was prepared for the economic crisis that continues to unravel, affecting people in almost every socio-economic group.

Nor were the men immune to the losses caused by the dramatic downturn in world markets in recent months.

But Lumbard was bringing a bit of reassurance – and a reality check.”We’re not done with the recession and the market problems, but the tornado has already passed through the neighborhood. It’s time to open up the bank statements, see what they have and make rational decisions,” he told his audience.

“We still have a lot of consumers who are frozen in terror,” Lumbard said. “It (the recession) will last a while.”

Still, he advised that investors get back in the game, albeit after doing plenty of homework.

“The stock market has declined 47 percent in the past year, and 44 percent in the past ten years,” Lumbard wrote in his online newsletter at But investors who are putting their money into CDs and waiting for things to get better have decided to “sell low and buy high,” not a good strategy for recovering losses.

In the past, investors have chosen wealth managers by looking at their track records and office furnishings, Lumbard pointed out in his newsletter.

Be a part of this project

Now, they understand they need someone who will protect their assets, starting by choosing skillful and trustworthy custodians, he said.

Find a manager who will diversify your assets. Look for a cautious, but flexible approach, Lumbard said.

Weigh your investments: Stocks or bonds?

Study performance measures over a decade or more and seek out statistics that reflect a diversity of accounts, not just a few cherry-picked portfolios. And be wary of fees, he adds.

Lumbard said he talked about the coming economic storm a year ago during another presentation he made at the Hunt Community.

“The economy had entered a recession, we said, and later, we decided it had started in December,” he said. “We went out on a limb and said the recession was going to last a long time.”

As an aside, Lumbard reminded his listeners to avoid a Bernie Madoff situation by not placing money with a money manager without a third-party custodian.

“In an era of such confidence, there was such a low level of suspicion,” Lumbard said of the elaborate and far-reaching Ponzi scheme that stripped individuals and institutions of their assets.