Women's group learns about managing money in a tough economy

GAINESVILLE - A newly formed Gainesville women's group gathered at the Frances Meadows Center on Thursday to learn about managing money during the current economic downturn.

Karen Johnson, a regional vice president with Jackson National Life Insurance Company, spoke to 100 WomenSource members during their monthly Brown Bag Lunch series about "How to Manage Your Money in a Bad Economy."

Johnson said there is no right answer when it comes to investing in a volatile market, but stressed the importance of having some sort of financial plan.

"Randomly having investments at five different institutions is not having a plan," Johnson said.

She said there are three components to a sound financial plan: diversification, asset allocation and discipline.

Johnson said buying during a downturn can actually be a "prudent" investment strategy because stocks are priced so low. And she cautioned against selling off when times get tough.

Referring to the stock market crisis in 1973-74, Johnson said people who stayed fully invested in the market saw financial recovery in 21 months. Those that got out and waited six months before investing again didn't see recovery for five years.

"Paper losses do not become permanent unless you lock them in with a decision to sell," Johnson said. "Be mindful of your expectations, and the reality of achieving those expectations."

Johnson said markets do run in cycles, and that there is no way to tell when the current market will bottom out. However, she did offer some hope to the group.

"Many analysts have said that coming out of this current market crisis that we are looking forward to one of the best bull markets we've ever seen in our lifetime."

WomenSource is a non-profit charitable organization that was created through a partnership between the Junior League of Gainesville-Hall County, North Georgia Community Foundation and United Way of Hall County. The organization is designed to help women in the community achieve personal and professional success through educational programs, counseling and support groups.