Protect Your Pocket Series

Weathering the Financial Crisis

(originally published October 2008)

In Indiana and across the nation, businesses and consumers alike are bracing for the impact of the current financial crisis. We are all concerned about the lasting effects of the economic downturn on our families’ long-term financial health. About half of all Americans now hold some stocks, either directly or through 401ks and mutual funds, and none of them have been spared from the recent recession-like rumblings.

Indirectly, the current state of affairs is also drying up credit, making student loans harder to get, cars harder to buy, and, by keeping the real estate market depressed, cutting into the value of homes. As a result, some people are already looking at their balance sheets and rethinking their retirement plans and other investments.

It’s necessary to understand that investing for your future is a commitment and something you should continuing doing, even in this time of uncertainty. Younger investors should not panic, focusing on the long-term results of the market rather than the current climate. Senior investors and those nearing retirement should take their time in making any decisions regarding pulling their assets out of the market and looking for alternative ways to build their wealth.

Economic uncertainties must not drive investors to make sudden and uninformed decisions out of fear. Because of my job as Indiana’s Chief Investment Office, I unfortunately know that con artists will prey on the worries and fears of investors, promoting various investment schemes with promises of big returns.

It’s more important than ever before to make informed decisions about long-term financial holdings and to seek the advice of a trusted investment adviser or financial planner before making any sudden moves with your money.

Research and advice from a trusted professional is a consumer’s best line of defense against unscrupulous individuals looking to take advantage of the turbulent economy.

Request written information that fully explains the investment, such as a prospectus or offering circular. The documentation should contain enough clear and accurate information to allow you or your financial adviser to evaluate and verify the particulars of the investment.

Even if your investments are limited to an employer-sponsored retirement plan, such as a 401k, get unbiased advice and guidance before making any significant changes to your long-term savings and investment strategy. The headlines are troubling, but consumers need not clear out their retirement savings as a result.

Most importantly, use common sense. If you’re presented with an investment opportunity that seems to offer unusually high returns in comparison to other investment options, it should be a red flag. Seek advice from a professional, trusted third-party before buying in to the hype.

To safeguard your finances prior to investing, check out my office’s searchable database of registered brokers and investment advisers at or call 1.800.223.8791.

If your investments — or your brokerage firm — have already suffered as a result of the Wall Street turmoil, there’s still hope. The Securities Investor Protection Corporation (SIPC) maintains a special reserve fund authorized by Congress to help investors. SIPC acts either as trustee, or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds. Although not every investor is protected by SIPC, they have helped more than 600,000 investors get their investment back. To learn more, visit

Related Information:

- Search database for licensed brokers and advisers

- Contact the Securities Division