Bu ART BUKOWSKI and SHERI McWHIRTER
Record-Eagle staff writers
October 11, 2008 12:00 am TRAVERSE CITY -- Brian Kriesel isn't feeling very well these days. He's become increasingly queasy watching the tumultuous stock market activity over the last week or so, and doesn't want to talk about how much money and stock value he's lost. "I've been poor before and I'll be poor again," the Traverse City resident said Friday as he stood on a Front Street sidewalk. Kriesel has a 401(k) retirement account and keeps a small online stock account. The market's free-fall won't cause him to pull out of the market, though. "Blind faith. It's come back before," Kriesel said. "I think all the baby boomers aren't going to be able to retire. I've got a longer way to go." Kriesel's sentiments echoed along Front Street amid a jaw-dropping stretch that saw the Dow Jones Industrial Average shed about 2,400 points since the first week of October. "It's bad news, but I think you have to look at it in the long term," said Chet Byerly of Grand Rapids, whose investments aren't faring well. "I'm not going to take money out ... I'm going to hope for the best. There's fear in the whole system and I'm hoping some of the things the government is doing will get things turned around." Recent stock trends have deeply worried many local residents, said Erik Falconer, of Traverse City-based Falconer Asset Management. "The biggest concern people have ... is could this be a worst-case scenario?" he said. But Falconer and other local financial professionals are trying to push calm amid the turmoil. Financial market downturns are cyclical and natural, they said, and they offer positive financial prospects. "Opportunities and prospects for returns going forward are much better than they were a year ago. They're better than they were three days ago," he said. "Yeah, people want to get out, but the opportunities in extreme markets are ... having the courage to stay in the market when everybody else is getting out," he said. Market jitters should cause some people to take a long, hard look at their investments, said Paul Sutherland, president of Financial & Investment Management Group in Traverse City. "For people that are managing their own portfolio, this is a really good time to say, 'Is my portfolio structured right?'" he said. But like Falconer, Sutherland contends it's a good time to invest. "This is when you want to be looking forward and not getting caught in the headlights," he said. At least one local bank is experiencing an increase in deposits, and an official there believes it might be because customers are concerned about the stability of larger, nationwide banks and are pulling their money from those institutions. "We're seeing, interestingly, a lot of deposits coming into the bank," said Doug Zernow, marketing director for Northwestern Bank. "I think they're hearing about some of those larger banks, and those are the ones that are looking like they're in trouble." More people than ever are inquiring about federal deposit insurance and other protections that once were taken for granted, Zernow said. "There's some people that just want to be assured that they're covered," he said. The bank also is witnessing a normal volume of loan applications, Zernow said. "From our standpoint, the only negative is there's a misrepresentation that no banks are lending, and that's not true in our case," he said. Dr. Charles Danek of Traverse City said he's stressed, but not panicked about market losses and the toll on his investments. "It's depressing, especially getting closer to retirement age," Danek said. "The main conclusion is I've decided I'll have to work longer." Danek and his wife, Maria, said they are going to "hang in there" with the market, despite this week's staggering drop. "I think it will get better, maybe not quickly and only with the right administration," Maria Danek said. Others changed their portfolios. Marc Vigil of Ortonville was in downtown Traverse City on Friday and said "It's going to get worse before it gets better." Vigil invested about $30,000 in General Motors stocks over the years and the last time he checked, it's now worth about $5,000. He won't withdraw his cash, either. "It would be too much of a loss. I can wait," Vigil said. "I'm not that dumb." But Vigil began investing in Treasury bills, or T-bills, backed by the U.S. government. He also rolled over his 401(k) into a safer Individual Retirement Account, he said.
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