Thorunn Howatt
Northern News Services

Yellowknife (Sep 26/01) - Retirement savings amounts started trickling away about a year ago but in the last week investment cash has been caught in a whirlpool.

Financial consultant Sean MacGillivray: Yellowknife investors seem to be taking market fluctuations in stride. - Thorunn Howatt/NNSL photo

"Overall I would have to say most people have been quite understanding towards what has gone on in the last 12 months," said investment consultant Sean MacGillivray, from Investor's Group Financial Services.

In the past few years skyrocketing stock exchanges have enticed investors.

Through registered retirement savings plans, money has been dropped into seemingly safe and profitable company shares on The Toronto Stock Exchange. But the climate changed drastically after the terrorist attacks south of the border.

"My older clients have seen times like this before. This is not that uncommon. It's not the end of the world as we know it. They have been through 1987," MacGillivray said, referring to black Monday, a day when stock exchanges spiral downward.

While younger people are horrified to see the value of their savings plummet downward, those who have played the money game longer know that market fluctuations are just part of investing.

"Some people understand it and some people are a little shell-shocked," he said. "During the Korean War the market dropped off 12 per cent and then a month later it was up by 10. Three months later it's up 15. Sad as it is, if the United States goes to war, it's always good for the U.S. economy," said MacGillivray.

War time expenditures can stimulate an economy and people historically spend more money after a war is over.

"About this time last year we were at about 12,000," he said explaining that the Toronto Stock Exchange has dropped to nearly half that amount.

In addition, the World Trade Centre attack provoked markets to fall about a further 10 per cent.

The stock exchange has hovered around the 6,800 mark this week.

"People were getting used to making 20 per cent a year," said Assante Capital financial advisor, Bert Griffin. "This is a reality check."

Market capitalization, shares outstanding and trading price of those shares on a given day are taken into account when formulating the number that measures the top 300 companies on the Toronto Stock Exchange. The top 300 are made up of a mix of banks, utilities companies and typically solid public companies.

"It's a great opportunity to put more money into the market," said MacGillivray.

Although technology stocks were once the darlings of the market, they are considered to blame for pulling the market down. Investors are looking to diversify their portfolios.

"This whole year has been a great opportunity for bonds," MacGillivray said.