Financial advisor stresses prudence

By GARRETT NEESE, DMG Writer

Editor's note: Today we continue our weekly series offering a local perspective on the current financial crisis. For several weeks, local experts will weigh in on options to protect your investments during this unsettling time.

HOUGHTON - There is no overlap between the ranks of local financial advisors and the on-air staff of CNBC.

So given the chance to follow in the footsteps of Jim Cramer or Suze Orman and make a pronouncement about the golden ticket must-buy stock of today, Dan Dalquist declined.

"To make a blanket statement, like do this or do that, that gets me fired ... I don't want to be a ward of the state," he said.

The siren call of anecdotal information can be strong (Campbell's Soup went up in the stock crash! Former Phillies outfielder Lenny Dykstra's picks made $200,000!). But an all-encompassing recommendation, Dalquist said, doesn't take into account the individual, and what level or what kind of risk they're comfortable with.

To illustrate his point, Dalquist used a non-financial example. As a professional ski instructor, he thinks nothing of zipping down a hill.

But he's less comfortable when the actions out of his control- whether it's a rollercoaster or a Ferris wheel.

"If someone is going to invest in equities, they need to know what their tolerance of risk is, they need to thoroughly understand the investment they are buying, and what the associated costs are with that investment," he said.

The varying financial needs of a 20-something making their first 401K contributions or a 60-something nearing retirement. But for different age brackets, the one-size-fits-all approach doesn't work, Dalquist said.

"The process is all about knowing what you want to do with the money, knowing your comfort level with the choices, and educating you about the choices," he said. "There isn't any one form saying 'Do this for this person,' 'Do this for this age group.'"

During his visit to Houghton, Minneapolis Federal Reserve Bank President Gary Stern told a crowd of Michigan Technological University students that many people would see substantial losses; however, there would also be opportunities for some people to make significant amounts of money.

Dalquist, too, recognizes that the current economic doldrums aren't going to last forever.

"All the people I interact with over the phone, in person, some folks are nervous, some are looking at opportunities," he said. "The biggest thing is that the circumstances we're experiencing now are somewhat terrifying, somewhat scary, but our economy's been through things like this in the past, and we will go through things like this in the future. The best advice is to talk with your advisor and get a clear sense of how things are working for you."

Garrett Neese can be reached at gneese@mininggazette.com