ATLANTA--(BUSINESS WIRE)--Eads & Heald Investment Counsel is advising investors to maintain a longer-term investment time horizon during the current financial crisis.
“Times such as these test the patience and resolve of investors,” said R. Stewart Eads, president and co-founder of Eads & Heald Investment Counsel. “The principles of owning a well-diversified portfolio of high-quality, fundamentally sound companies are now more important than ever.”
Eads cautioned investors to stay away from products that are difficult to understand, and to avoid attempting to time the markets over the short-term.
“Portfolio strategies that provide attractive long-term performance results tend to be those that take the good with the bad over time and shield investors during challenging times,” he said.
Eads explains the current financial crisis did not appear overnight, saying its creation goes back many years with no shortage of blame to go around for failing to heed early warning signs.
“At the root of the current turmoil is the bubble and subsequent deflation of the housing market that took place over the last several years,” stated Eads. “A combination of record low interest rates, lax lending standards, federally mandated programs promoting affordable housing and the assumption that home prices would rise in perpetuity, all contributed to the rise and fall of housing.”
Another explanation is that a major flaw in the U.S. system of government is that [the government] does not seem able to deal with a problem until it is well into crisis mode.
“Witness 9/11 and airline security,” Eads commented. “Politicians did not want to inconvenience air passengers until the harsh reality that more comprehensive security measures were needed became clear. The crisis du jour is in the financial markets and politicians are once again reacting to the problem at hand instead of recognizing the early signs that could have headed off our current financial crisis.”
Eads & Heald Investment Counsel believes that some banks may still fail or merge, but if the Federal Reserve, U.S. Treasury and foreign governments are successful in their efforts to stabilize the banking and financial industries, the U.S. economy could begin to get back on track by mid 2009.
Eads & Heald Investment Counsel has a 21-year history of managing customized investment portfolios through periods of economic euphoria and despair. See www.eadsheald.com.