GUY RAZ, host:
From NPR News, this is All Things Considered. I'm Guy Raz covering for the regular crew on this New Year's Day. If you made any money in the stock market in the past several years, chances are your gains were wiped out in 2008. This last year, the Dow Jones Industrial Average posted its worst showing since the Great Depression. It's down more than 30 percent from its high point in 2007. So, is there any hope for 2009? Well, to help guide us through these turbulent economic times, we turn to Roben Farzad of BusinessWeek, who is in Miami. Is that right?
Mr. ROBEN FARZAD (Senior Writer, BusinessWeek): That's right.
RAZ: So, Roben, is there anything to look forward to in 2009, or more of this sort of same doom and gloom?
Mr. FARZAD: Alas, hopes spring eternal, and the practitioners on Wall Street, at least those who are left, are saying that maybe we can hang our hats on something for the second half of 2009, particularly if the new administration and the new regime in Capital Hill pushes through upwards of maybe $750 billion of stimulus.
RAZ: So, then any positive economic signs are saying, depend on whatever the stimulus package is going to be.
Mr. FARZAD: Well, what else is there driving it right now? I mean, we had a speculative real estate bubble of epic proportions and the stock market has lost its biggest, I think, numbers since 1931, and everything that could fall apart, did fall apart. So, the last thing people want to do is open up their 401k statements, much less, you know, send $10,000 to Fidelity or E*TRADE.
RAZ: What's one of the most depressing things to do is to open up that 401k statement. So, how do you sort of force people not to do that? What do you do? I mean, do you usually(ph) meditate or yoga or something?
Mr. FARZAD: Well, it's interesting that you mentioned the spiritual side, because at a time like this I like to say that in my private life I'm a nice Jewish boy, but when it comes to the stock market, I'm a devout agnostic. And I think that speaks to the fact that Americans have a fundamentally unhealthy relationship with the stock market. They tend to get in when times are hot, hot, hot, it's go go and the hot money is pouring in, and they want to get out conversely when it's probably the most inopportune time to get out. That kind of behavior doesn't really serve you well in the long haul, or the short haul when you need to be much more cold eyed and deliberative and just be averaging in and controlling the things that you can because obviously this year showed us that there are myriad variables that you can't control.
RAZ: But, Roben, this is America. We are supposed to be optimistic, I mean, can you offer us any hope, any sector or stock that might be looking good for this year?
Mr. FARZAD: Well, I tell you this, there's a record amount of cash on the sidelines. And this cash isn't earning squat. It's all bunker mentality. The only bank that's making money now they say is the national bank of Sealy or Serta, you know, you're just tucking it under the mattress. That money I can guarantee you is going to search for a home. And it's going to just sluice into some asset class, whether it's commodities again, real estate doubtful. The thinking man is saying that it's finally going to be the stock market.
The only thing you can do is diversify. I know it sounds cliche, it's like telling you to drink milk and stay in school, but buy as many different asset classes as you can with the lowest possible cost. Do it often, do it in increments, and be dispassionate about it. Because the only millionaires we have in our midst, stock market investors, they are dispassionate ultimately. They don't let their emotions get the best or worst of them.
RAZ: Roben Farzad is a senior writer for BusinessWeek. He spoke with us in from Miami. Roben Farzad, thanks for being with us.
Mr. FARZAD: Thank you for having me.