The Small Investor Takes News In Stride
U.S. banks and mutual fund companies reported only a slight increase in consumer business Monday as news of a Soviet coup roiled markets worldwide.
After the stock market crash of 1987 and the mini-crash two years later, "people are getting a little more used to the shocks and the volatility that follows the shocks," said Laird I. Grant, division manager for equity investments at U.S. Trust Corp., New York.
At companies that experienced an upswing, customers generally wanted to know how to reduce exposure to foreign markets.
Rise in Small Transactions
Steven Norwitz, a spokesman for Baltimore-based T. Rowe Price, said his company received about 40% more calls than typical for a Monday. "People are doing more trading than normal," he said, but the transactions are not very large.
Vanguard Group, by contrast, said its phone call volume was running about average for a Monday. "For now, it appears investors are staying the course," said a spokesman for the Wayne, Pa.-based company.
Consumers who did move money generally opted for money market funds and treasuries and pulled out of equity funds, said bank and mutual fund officials.
Susan Haney, head of private banking at Bank of Boston, said her customers are generally long-term investors. They "are going to sit tight," she said.
But some observers said funds may shift more in coming days. "Individuals are just starting to see and think about that today," said Donald Hearn, senior vice president in charge of mutual funds at U.S. Trust.
Any major shift in funds would probably take three or four days to show up, said Dushyant Pandit, vice president of Provident Institutional Management, a mutual fund unit of Provident National Bank.