High prices, business failures and Congress’ struggles with the so-called bailout bill have many investors concerned and unsure where to turn.

“I’ve been hearing a lot of concern from people here in Cleburne about the strength of the financial markets,” said Neal Logan, financial adviser with Edward Jones’ Cleburne location.

Logan and Dr. Jerry Chi, Southwestern Adventist University professor of business administration, cautioned investors to remain calm and to educate themselves about the investment opportunities available to them.

“Investors need to remember that the market has always come back,” Logan said. “In 108 years we’ve had 31 bear markets, where the market sustains a 20 percent or more dip. And 31 times we’ve come back to set all-time new high records.

Logan distinguished between savers and investors.

“Savers just want to hold on to the money they have, and they’re not looking for a big return,” Logan said. “Those people need to be in the banks with money market accounts or certificates of deposit. They definitely don’t need to be in the stock market right now.”

Investors, on the other hand, are those people wanting a better growth rate for their money than normal bank accounts can provide, he said.

“Serious long-term investors should stay calm and stay in the market,” Logan said. “And not let panic and fear motivate them.”

That includes people participating in profit sharing plans, 401K or retirement plans, mutual funds or saving for their children’s education, he said.

Although action on the bailout bill, meant to rescue failing financial institutions, and the upcoming election have intensified public awareness of recent financial troubles, Logan said the political scene probably doesn’t make as much difference as the media makes out.

“Market forces are going to fix this mess, not politics,” Logan said. “Our strong U.S. economy and 150 million workers. I’d encourage people to pull back some from the day-to-day coverage of the political scene.”

Investors, Logan said, can control three things. The first is the quality of their investments, which should be high. That means the market-leading companies, or so-called blue chip stocks that have a strong historic track record.

“This isn’t the time to be speculative in stocks,” Logan said. “We’re in bear market number 32. And while no one can predict the future, this is a good time to pick up quality stock, it’s the blue-light special at K-Mart.”

Chi agreed.

“The strongest stocks always tend to come back stronger,” Chi said. “The leaders in an industry. Think of building material suppliers like Home Depot or Lowe’s. When credit becomes more available, builders are going to go to places like that to buy supplies.”

The second factor, Logan said, is the diversity of one’s financial portfolio. The right diversity equation differs from person to person depending on the tolerance for risk, he said. To determine risk level, a person should do some research or talk to a financial adviser, Logan said.

Diversity should include some mix of cash, quality stocks, growth and income stocks and foreign stocks, Logan said.

The third factor is the length of time one plans to stay in the market.

“So, it’s your time horizon and risk tolerance,” Logan said. “But there is no perfect investment. You’re going to have to learn to live with short-term setbacks in all long-term investments.”

Chi also stressed diversity. Additional investment options include investing in homes during the downturn of the real estate market and investing in bank CDs for longer than a year to take advantage of higher interest rates.

Both stressed the need for financial planning.

“Investing is pretty simple, but it’s not easy,” Logan said. “You need goals and a written financial plan. Those goals plus your risk tolerance help determine how to properly allocate investments to get there.”

Logan further advised that people generally should not invest in the stock market until they have three to six months of cash reserves, enough to cover basic living expenses, built up.

Chi urged investors not to be pioneers but to watch and follow the movements of those who have done well in the market, such as investor Warren Buffet and others.

Chi and Logan both noted that Buffet is investing in the market.

The two differed on investing in gold, however. Logan called it a bad idea.

“Over a 50 year period, the average rate of return on gold has been about 4 percent,” Logan said.

Chi said people buy gold during turbulent economic times to try to preserve the value of their money, which could push prices higher.