Roger W. Ferguson, CEO of financial services giant TIAA-CREF and one of the nation’s leading economists, was recently named to President Obama’s Economic Recovery Advisory Board, the influential body charged with providing recommendations on remaking America’s battered economy.
The former vice chairman of the board of governors of the U.S. Federal Reserve System recently sat down with Black Enterprise magazine to discuss the economy, investing, and how to make sense of this recession in an article that will appear in the July issue.
Here are some of the outtakes from that interview:
Black Enterprise: From an economic standpoint, do you expect more of the same for the remainder of 2009?Â Are you looking at 2010 as a turnaround year?
Roger W. Ferguson: I think there are some clear signs of a turnaround towards the end of this year but I think the risk around that might be too optimistic.Â I don’t expect to be surprised with a turnaround this quarter or next quarter.Â I may be surprised by seeing a turnaround that is delayed toward the first quarter of 2010.
But in the meantime with all the turbulence in the market, what sort of things are you telling clients these days?
We’re telling them a number of things.Â First we’re telling our clients to remain calm, do not make rash decisions, do not make short term decisions that they will regret in the long term.Â We certainly are telling them, obviously, to reach out for advice, so don’t make decisions on your own.Â And once we get into the mode where we are advising, I think our general perspective is think about their long term plans, what they’d like to see for their future, how much appetite they have for risk. And we remind them of some basic rules about investing.Â So, certainly, broad diversification still counts.Â Do not run away from equities.Â Do not run to fixed income or vice versa. Secondly, obviously, think about, again, the long term horizon.Â That’s sort of the range of things we’re telling them.