Investment guru no stock magician
Victoria Colliver
OF THE EXAMINER STAFF ÿSept. 16, 1998 <Picture>
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Let's get this over with right now: Investment guru Peter Lynch has no idea what the market will be like in six months, a year from now or more. So stop asking.
As for this latest market plunge, if you can't handle the cyclical volatility of the marketplace, maybe you shouldn't be in stocks.
Having just launched a new advertising campaign and in town to open a Fidelity investment center, the former portfolio manager of Fidelity Magellan Fund and now vice chairman of the investment advisor branch of the firm has been remarkably consistent in his message: People, in general, are confused about investing.
According to a Fidelity Investments survey by Yankelovich Partners, investors in San Francisco are a little more knowledgeable than their counterparts nationally, but they are less confident about reaching their investment goals. They also set aside a larger percentage of their income to invest - 16 percent compared to 13 percent nationwide - but spend less time researching their choices.
"People here in San Francisco save a lot more money than the rest of the country, but they're confused. They're frustrated," said Lynch, during his visit to The City Tuesday for the grand opening of Fidelity Investments' new investor center on the corner of Montgomery and Market streets. The center opened to the public Aug. 31 - the day the Dow Jones industrial average took a 512-point dive.
Lynch said the confusion and lack of confidence on the part of local investors was tied to knowledge. "The more educated, sophisticated you are, the more worried you are," he said, attributing the investment knowledge to the large number of people in the Bay Area with college educations and advanced degrees. He added California's long, painful and relatively recent recession might work to erode confidence levels.
But despite the relative sophistication among the locals (a third of San Francisco investors know the price of Treasury bonds will go up if interest rates fall, compared with a quarter of investors nationally), people here who own stocks, bonds or mutual funds admitted in the survey they spent far more time researching major purchases and vacation plans than checking out their financial decisions.
"People don't know what the heck they're doing - and they want to know," explained Lynch, who is emphasizing that theme in a new ad campaign for Fidelity that features comedian Lily Tomlin.
An imposingly tall man with relentlessly white hair, the 54-year-old Lynch has become a recognizable figure in investment circles - even to the casual investor. But the new campaign, which started its run Friday, is a departure from traditional investment commercials featuring landscapes or pie charts.
There's Lynch on an out-of-control treadmill, as Tomlin tries to monitor the stress test while Lynch is explaining how the volatility is just like the stock market. Another spot features Tomlin as a Department of Motor Vehicles worker who attempts to squeeze a hot stock pick from Lynch in exchange for speeding up license renewal (he warns investing on such tips is akin to gambling). Finally, Tomlin in her Judith Beasley housewife character accidentally destroys a newsstand after achieving information overload from the number of financial magazines.
Fidelity's head of customer marketing, Stephen Cone, is credited with lightening up Fidelity's look. Cone, who took over the position in January, said he wanted to create memorable spots that stood out from other investment services ads, which account for about $4 billion in marketing dollars industrywide.
"We're taking . . . a bit of a risk, but even if they don't like the ads, they'll remember them," said Cone, who would not reveal the campaign's cost. "No one remembers financial services advertising, so obviously the somber approach ain't working."
Cone said he wanted to create segments during which Lynch interacts with someone playing different characters. Tomlin came up because she is known for her characters, and she turned out to be a fan of Lynch's investment approach, he said. These were the first commercials Tomlin has ever shot.
"It was like getting three actresses in one," said Gail Schoenbrunn, creative director and writer with Hill, Holliday, Connors, Cosmopolus, the Boston ad firm that did the spots.
"These were not easy shoots - they're long days," Schoenbrunn said. "Here's a guy (Lynch) whose time is money. But Peter seemed to enjoy doing them immensely - and meeting Lily Tomlin."
Joel Drucker, an Oakland-based marketing and communications consultant, said the ads helped bring a friendly face to an industry that had been saddled with a staid, institutional image. "Obviously money is serious, but the economy is fairly good," he said. "You may not have seen these ads 20 years ago when inflation was 20 percent."
Lynch said each ad had one of his primary messages: market volatility, informed investing and information overload. "Literally, you could learn a lot in a few minutes," he said, trying to explain that people could go a long way sticking with a few principles.
But the one question people still expect him to answer is about the future. "I'd love to get next year's Wall Street Journal," he said. "I've been trying to get it for the last 25 years."
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