On May 27 Who’s New, a women’s organization that welcomes newcomers to Panama, held its final morning presentation of the season at the Hotel Caesar Park. Elizabeth Haruch, a licensed stockbroker who worked for Merrill Lynch for seven years, mostly helping clients in Panama invest in US markets, gave her "Overview of Money Dynamics for the 21st Century."

Before her talk began, The Panama News had the opportunity to ask opinion about Panama’s Bolsa de Valores. "The stock prices don’t reflect the market value," Haruch noted about the Bolsa’s stock side. She linked the low trading volume, unchanging stock prices of companies in serious trouble and paucity of disclosed information about the state of businesses whose shares are traded as related phenomena. Her opinion about the bond side of the Bolsa’s trading was a bit more upbeat, and the much higher volume of bond trading than stock transactions on the exchange is a good indication that the market agrees with her on this point. She said that people still need to know the companies or public institutions whose bonds they buy and be aware of the rated risks of various bonds, but with those caveats there are some reasonable deals on the Panamanian bond market.

For Haruch, American industry may have its ups and downs, but it’s the best place to invest over the long term. However, she made it very clear that she doesn’t have "one size fits all" investment advice to give.

"Every person is unique," Haruch noted, "and no person can do the same thing as someone else." She said that an individual investment plan must take into account a person’s age, goals in life, income, family responsibilities and other factors. She also had some basic advice about attitudes. "Money is a tool," she reminded the audience, rather than life’s goal. "Too much emphasis on money can disturb your whole life," she warned, while also noting that the more common mistake is not to make any economic plans at all. "You have to save a portion of your money, but you don’t have to save everything. You have to live well, but you can’t let this govern you."

As a general goal, Haruch advised, most people should save about 10 percent of their income. Then come the decisions about how to invest the savings to conserve them and make them grow. "It’s not a game --- you just don’t play the market," she warned. She added that too much attention to daily market fluctuations is an error that leads a lot of people to make unwise panicky decisions when the market is down. "We should always be aware of volatility, but you should never invest with a short-term outlook," she counseled, pointing to the 1987 stock plunge as a good example of how those who panicked lost a lot of money, while those who stayed in the market for the long term came out ahead.

Haruch outlined the various investment options, including stocks, bonds, real estate, mutual funds, the money markets, certificates of deposit, commodities and derivatives. She briefly went over the process by which companies are valued, noted how the Dow Jones Industrial Index is calculated and pointed out the questions that an investor ought to ask when considering a mutual fund. "Look for funds that have behaved well in a down market," she advised, adding that "if you don’t receive this information, don’t buy it."

In the bond market, Haruch identified AAA, AA, A, and BBB as "investment grade" bonds and said that "it’s laughable how many people pay too much for bonds," for example paying $1,100 for a $1,000 bond. She also warned that, although US Treasury bonds are safe because they’re backed by a stable and wealthy government, they pay low interest rates and there’s a penalty for cashing them in before maturity.

The stockbroker doesn’t much like the commodities market for individual investors, particularly the highly speculative derivatives. She pointed out that oil is very sensitive to political changes, and called commodities futures "very volatile and very dangerous."

Haruch advised the audience to consider the broker’s commissions as part of their investment calculations, and noted that while the Internet is a good way to look up market information, most online discount brokerages won’t deal with people who are not US residents.

The discussion got around to current events. Although airlines were severely affected, Haruch said that in the end the economic consequences of the September 11 attacks were not as bad as had been feared. She noted the increasing tendency of investors to include ethical considerations in their stock purchasing decisions. She attributed Enron’s collapse mainly to accounting fraud in collusion with Arthur Andersen, and predicted that the experience will lead the markets to be more vigilant about such things. "The market is made by people in the end, and you have to use your common sense," she concluded.

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