GIBSONIA — Two financial advisers Thursday afternoon tried to allay the fears of the nearly 100 seniors who attended a seminar entitled "Mae, Mac, Mergers and the Market."

The forum was presented at The Village at St. Barnabas. The two advisers from Hefren-Tillotson discussed the current volatile economic conditions and how senior citizens should protect their investments.

Research analyst Brian Koble recommended everyone, seniors and aggressive young investors alike, make rational, nonemotional economic decisions in dealing with an unsteady stock market.

"When people become concerned about their financial situation, you find one of two things happen," said Koble. "They either panic or stick their head in the sand."

He said investors have not been this nervous since the stock market crash of 1987.

But, he said, unlike other severe drops in the stock market, this economic crisis was caused by decreased values in the housing market.

Koble said falling home prices nationwide led to mortgage debt losses for banks, which caused banks to curtail lending. That decreased personal and business spending which causes higher unemployment. That leads to the original problem: falling home prices.

"It's a vicious cycle," said Koble.

He predicted the panic-induced drop in the stock market will calm in the next few weeks because of the recent $700 billion government financial bailout plan.

He forecast another bailout enacted after the new president takes office in January will stop the cycle completely.

Koble said although the economy is clearly in a recession, actual stock prices are on a par with those in 2000. He strongly advised against selling shares while prices are down.

He said many times, investors repurchase the same stock once its value increases, which means they sold it at a low point only to buy it again at a higher price. The investor has then lost all the profit he could have collected had he held onto the stock.

Koble counseled seniors to adopt a pain vs. injury strategy known as "cash-flow matching" when it comes to investments.

"If you are in the stock market today, you're in pain," said Koble, "but pain goes away. It'll go away when the stock market rebounds. Don't sell out and turn pain into permanent injury."

He said seniors should look at three scenarios regarding their investments:

n Immediate needs. If seniors have major expenses in the next 12 to 36 months, they should have access to cash.

• Intermediate needs. If seniors see financial need coming in three to seven years, bonds would be a good investment. Koble said bonds can be "perfectly safe" if the correct ones are selected.

• Long-term needs. If financial need is not expected for seven years or more, stocks are the best bet.

Adviser John Mackie said seniors should meet with their financial professionals to protect their investment portfolio by ensuring their holdings are continuing to meet their objectives.

He said financial goals change with major life events, and funds should be reallocated accordingly.

Mackie also said people should unify their investments. He said he often sees disorganized holdings in which couples have scattered investments they have obtained over a lifetime. He recommends investments be consolidated to fit a couple's financial goals.

He also said many investors are confused or uninformed on how to switch from accumulation to distribution when it comes to their holdings.

"They don't know how to get cash every month for their bills," said Mackie.

One woman asked about the chances that the economy will become so dire that dividends from some companies could end.

Koble said health care, industrial and utility companies remain stable with dividends, but cash-based businesses such as banks could potentially cut dividends.

A man asked about the impact of the presidential election because he suspected income taxes would rise regardless of which candidate wins. He is worried that any financial gain would be negated by a tax increase.

Mackie speculated that if Democrat Barack Obama wins, income taxes will rise immediately., but if Republican John McCain takes office, taxes will rise after 2010.

St. Barnabas resident Teddy Esler said the presentation helped alleviate the fears of her octogenarian husband, who is a retired financier.

Esler summed up the feelings of all the senior citizens who never dreamed their investments would be in jeopardy in their golden years.

"We lost it on paper, but we never had it in our pocket," said Esler, "but we're going to need it soon."