Stockbroker Is Advising His Investors to Tough It Out

With the stock market taking its lumps recently and interest rates taking off, what is a veteran Ventura County stockbroker advising his clients to do with their money these days?

Broker Glenn Fitzgerald, 48, of the Ventura office of Dean Witter, advises many investors to tough it out, even adding to their stock holdings in line with the dollar-cost-averaging philosophy that Fitzgerald has advocated for years.

“It’s hard to convince people it’s true, but a weak market can be beneficial” Fitzgerald says, because “it offers a chance to buy stocks at reduced prices.

“When the stock market recovers, as it always has in the past, you’re in a position to make higher profits.” He mentions utilities as one stock group that he believes has been oversold.

That’s just one strategy. Another, especially favored by Fitzgerald’s older clients who are living on fixed incomes, is to take advantage of rising interest rates by moving into bonds, money market funds or U. S. Treasury paper.

A year ago, Fitzgerald recalls, two-year Treasury notes yielded only about 3% annually. Today, he says, one can purchase such notes offering a 7% yield.

If the bond market continues heading south, the notes’ market value could decline, too. But in two years, when the paper matures, holders will get their investment back, besides enjoying a tidy return on their money, Fitzgerald said.

Fitzgerald was 26 and just out of the Air Force when he joined Dean Witter in 1972. In addition to selling securities, he’s now assistant manager of the Ventura office. The unit moved eastward from downtown to Victoria Avenue in the late 1970s.

“In the early days, people in the county tended to put their money into oil industry stocks. It was an understandable approach in view of the local importance of oil in those days.”

But as the number of oil producers and oil-field service firms in the county dwindled, Fitzgerald received fewer and fewer orders for oil stocks. “In those days as now, my customers have tended to invest in companies and industries they’re familiar with.”

Currently, his customers are more likely to favor the securities of biotechnology or computer-related companies, which represent fields now gaining prominence in the county’s economy. “There have been other changes. Some of my clients are quite elderly now. They were in their 60s when I started out, and many of them have stayed with me.

“And, of course, the investment mix has changed a lot. The number of mutual funds has exploded. More and more, people are buying them instead of individual stocks and bonds.”

Perhaps the most significant development of all, Fitzgerald believes, is investors’ increased knowledge and sophistication. “There’s been a vast improvement in financial publications that cover companies and the economy. I offer guidance if I’m asked to, but many of my customers do a lot of their own research.”

Fitzgerald sums up his long-term view of the market: “Let’s face it, a year ago, things felt a lot better than they do now. But five years from now, I’m sure the people who’ve stayed with it will be glad they did.”