Online Brokers Send E-Mails to Reassure Investors

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Investors reacting to the recent volatility in stocks were asked not to panic in e-mail letters sent out last week by the heads of online brokerages and

Designed to prevent closures of online accounts by new investors, the letters to clients and mailing lists were e-mailed less than a week after the April 14 plunge in the Dow Jones Industrial Average and Nasdaq index. The following Monday April 17, the Nasdaq recorded its highest point gain, and the Dow was up 3 percent.

E-Trade Chairman/CEO Christos M. Cotsakos, acknowledging the stock market's sharp moves in both directions, said the U.S. economy still enjoyed the benefits of a decade-long boom. Unemployment was low; inflation below historic averages, and productivity growth was at a record high.

"Especially in times like these, it's important that all investors, myself included, need to take a step back to think about where we've been and where we're going so we don't overreact," Cotsakos said. "Your investment lifetime will include a number of market cycles. How you react and manage those cycles will have a major impact on your success in building wealth over the long term."

Similarly, Schwab's letter advocated the advantages of long-term investments.

"Although volatility is in the spotlight, long-term investors know investing requires patience and discipline," Schwab said.

The letter had four pieces of advice for investors: Stocks are long-term investments; always consider risks; don't forget to diversify; and educate yourself. At the end, Cotsakos also recommended other investment instruments such as bonds, mutual funds, CDs and IRAs. Of course, E-Trade offers all of those.

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