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Citizens Practice Patriotic Investing

Sam Eaton
10/01/2001

In the days that followed September 11’s terrorist attacks political leaders called on US citizens to invest in America as a way to soften the economic blow. Many have turned to the stock market, buying shares in Boeing and airline companies as a way to help out. But as KUOW’s Sam Eaton reports, these patriotic efforts have questionable results.

IN THE AFTERMATH OF THE TERRORIST ATTACKS BELLEVUE RESIDENT DEBORAH KAPPES-CASSIDY WAS FACED WITH THE DIFFICULT TASK OF TRYING TO EXPLAIN THE EVENTS TO HER 8 YEAR OLD TWINS. RESPONDING TO THE CALL TO INVEST IN AMERICA AS A WAY TO NOT LET THE TERRORISTS WIN, SHE HELPED HER CHILDREN OPEN A STOCK PORTFOLIO… It seemed like the perfect time to show them that we believed in our country, and so it was patriotic investing, but to show them that we believed in the country, so we opened up little share-builder accounts for them where they can invest every week, and we bought airline stock because we wanted them not to be afraid to fly, wanted them to feel safe and know that everything was still going well. KAPPES-CASSIDY’S CHILDREN ARE TWO OF THOUSANDS OF FIRST TIME INVESTORS WHO’VE BOUGHT INTO THE STOCK MARKET OVER THE LAST TWO WEEKS. JEFF SEELY IS CEO OF NETSTOCK CORPORATION, A BELLEVUE-BASED ONLINE INVESTMENT COMPANY. HE SAYS THEY’VE GAINED OVER 20-THOUSAND NEW ACCOUNTS IN A 9-DAY PERIOD AFTER THE STOCK MARKET REOPENED. THAT’S 3-TIMES THEIR NORMAL ACTIVITY. WHILE MOST CUSTOMERS BOUGHT STOCK IN TRADITIONALLY SAFE COMPANIES LIKE MICROSOFT AND GE, SEELY SAYS AN UNUSUALLY HIGH NUMBER OF PEOPLE ARE BUYING AIRLINE STOCKS… The interest among our customers in buying airline stocks is up about 1500 percent, and I think that, while we haven’t interviewed our customers to ask why, our belief is that it’s an effort by a lot of investors to try to show support for the airlines, which are clearly hit by this tragedy. BUT IF THAT’S THE CASE, THEN IT RAISES THE QUESTION OF WHETHER THESE FIRST TIME INVESTORS ARE MAKING THE BEST DECISIONS. AS AN ONLINE BUYING SERVICE, NETSTOCK DOESN’T DISPENSE ADVICE TO ITS CUSTOMERS. STILL, SEELY INSISTS THAT NOW IS AS GOOD A TIME AS ANY TO BUY INTO THE MARKET, REGARDLESS OF THE INVESTOR’S INTENTIONS. I think that if patriotism is what’s inspiring some of these people to start investing then God bless, I think that’s great, I think my position is and it always has been that people should invest responsibly and they should do it automatically by dollar based investing, it’s more an issue of when you start investing and just keeping doing it. OTHER BROKERAGE FIRMS AROUND SEATTLE ARE REPORTING THE SAME TREND. BUT MANY FINANCIAL ANALYSTS ARE WARNING AGAINST INVESTING AS A CALL TO DUTY. JOHN FRY, A SENIOR PORTFOLIO MANAGER WITH LAIRD NORTON, SAYS DOING SO DEFIES THE VERY NATURE OF THE STOCK MARKET. Investing is primarily a non-emotional set of decisions and a desire to support one’s country is effectively, on balance, a set of emotional decisions and it’s important as investors not to confuse those two. THE CONCERN, FRY SAYS, IS THAT INVESTORS PUTTING MONEY INTO THE STOCK MARKET FOR EMOTIONAL OR PATRIOTIC REASONS EXPECT THEIR ACTIONS TO MAKE A DIFFERENCE. HE SAYS THAT SETS THEM UP FOR DISAPPOINTMENT WHEN THEY DISCOVER THE MARKET’S TRUE NATURE, PAIRED WITH THE FACT THAT THEY MAY HAVE MADE A POOR INVESTMENT CHOICE. The market is huge, it’s so much larger than any one set of individuals or individuals themselves, it’s the idea of a drop into the ocean as it were, little impact I would say from the standpoint of real economic effect. FRY SAYS WHILE PATRIOTIC INVESTING MAY BE WELL MEANING, GOING SHOPPING, SEEING A PLAY, OR DONATING TO THE RED CROSS WILL GET YOU A MUCH BETTER RATE OF RETURN IF YOUR AIM IS TO HELP BOOST THE ECONOMY. SAM EATON, KUOW, 94.9, PUBLIC RADIO.
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