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When the Markets Re-Open

by Tom Barrett

At this writing it is unclear when the markets will re-open. Here is my advice for when they do. Since most of the leaders in the international currency markets had offices in the World Trade Center, those markets are more likely to be disrupted than the stock markets. Although Wall Street itself was untouched, many of the major brokerage firms had offices in the World Trade Center. If the office you did business with was affected, use the Internet if you can. If not, try calling a branch of your firm in any major city to see if they can assist you. Make sure you have your account number available.

As far as trading strategy is concerned, tread lightly. In the first few days after the markets re-open they will almost certainly be somewhat illiquid. There are two reasons for this. First, the SEC will not wait until all firms are ready to trade before they allow the markets to re-open. We cannot allow the terrorists to keep our markets closed for very long. Second, some firms may be unwilling to commit cash to the markets until things are more settled. For these reasons, I would strongly urge our readers not to panic sell. Market history teaches us that following major negative events there is often a short down period, followed by a rebound. Normally the best strategy is to wait. This is particularly true for those of you with long-term positions.

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