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Updated 10:00 AM September 22, 2008
 

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Investment firms address financial uncertainty

The U.S. financial crisis has entered a new phase, according to Fidelity Investments, with the government focused on stemming turmoil from bankruptcy filings, corporate buyouts and foreclosures. But there may be light at the end of the tunnel.

In their annual summer forecast of the U.S. economy, Professor Emeritus of Economics Saul Hymans and colleagues Joan Crary, Stanley Sedo and Janet Wolfe say that three factors have helped our economy stave off a full-blown recession: strong and timely action by the Federal Reserve to prevent financial collapse, temporary tax breaks for households and businesses, and strong demand for U.S. products abroad.

While the economists essentially see no growth for the second half of 2008, they predict annualized increases in national output growth (as measured by real Gross Domestic Product) of 2.6 percent in the first half of 2009, 3.3 percent in the second half and 3.6 percent during 2010.

A TIAA-CREF statement reminds investors that regulators and policymakers have recognized the issues and the impact on both consumers and investors by taking careful actions to "contain the turmoil and rebuild investor and consumer confidence."

Fidelity agrees, saying in their own statement, "As bad as the current headlines appear, the silver lining is that the government is acting to avoid the worst mistakes of the past, when policymakers prolonged credit crises into decade-long catastrophes."

Both Fidelity Investments and TIAA-CREF have created Web pages providing investors with their perspectives on the current U.S. financial crisis, federal actions to mitigate the impact and information for investors on the importance of long-term diversified investing.

For TIAA-CREF's statement of financial strength, go to www.tiaa-cref.org/index.html.

For the Fidelity perspective, go here >

Participants in the U-M Retirement Savings Plan can invest through either Fidelity or TIAA-CREF or both.

For more on the U-M Retirement Savings Plan, go to www.umich.edu/~benefits/plans/
retire
.

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