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17

Diversify Y our

Investment Por tfolio

by

Philip A. Springer

n early September 2001, an investor in New Jersey, who I hoped to sign as a
I client of my wealth-management firm, called me to say that managing his $3

million-plus portfolio was getting too difficult and frankly unpleasant for him. On
Thursday, September 6, we met and he signed a contract with us. I told him that
the markets were very weak and that he should increase his cash reserves immedi-
ately. Fortunately, all of Bob’s accounts were already at Charles Schwab, where we
manage most of our assets. So we were able to start managing Bob’s accounts on
Friday, when I sold about $800,000 of his stocks and equity mutual funds.
We all know what happened on September 11, the following Tuesday.
Did I have inside information or a crystal ball? Of course not. I was simply
“listening” to what the financial markets were saying. After struggling through

the summer, the stock market weakened dramatically in late August, and the sell-
ing accelerated in early September. Regardless of the reasons for the sell-off,
I knew it was serious and that it was essential to slash my new client’s risk immedi-
ately, just as I already had done with my other clients. The markets were already
weak, making them even more vulnerable to the results of the 9/11 attack.

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