Jason Koski/University Photography

Cornell employees listen to Brett Hammond, chief investment strategist for TIAA-CREF, as he discusses the effects of the economic downturn on retirement investments at a seminar Nov. 18.

The removal of restrictive regulation in the 1990s led banks to blend commercial, insurance and investment services and to cross state and national boundaries; this produced a "herd of elephants" and caused today's economic crisis, said TIAA-CREF's chief investment strategist Brett Hammond, addressing some 240 Cornell faculty and staff in the Biotech Building Nov. 18.

Hammond, an economist of TIAA-CREF's Asset Management Division, detailed how the removal of barriers and an outdated oversight system produced the current downturn. He advised Cornellians to consult a trusted financial adviser to develop and stick to a long-term investment plan, to diversify their portfolios and to consider:

• Rebalancing their portfolios to take advantage of new investment opportunities emerging from the current economic conditions, such as low-priced stocks that offer attractive price-to-earnings ratios; and
• Annuitizing, that is, creating a steady income stream that provides a "floor" to withstand bumps and dives in the market.

"Cornell is very fortunate to have an economist of Brett's stature address our concerns at this time of uncertainty," said Mary Zielinski, assistant director of Benefit Services, who organized the event. "The sophisticated questions of the standing-room-only attendance of employees at the university showed their great desire to understand the dynamics of our economy and what their focus should be."

Jason Koski/University Photography

Brett Hammond

Hammond explained that in addition to inadequate controls leading to the crisis, people overseas saved at a rate several times that of Americans, who instead have been living on credit. Overseas savings are heavily invested in this country, creating a great demand for investment instruments. Real estate was seen as a good place for these funds, but when the market of qualified borrowers was saturated, lending institutions moved on to less qualified borrowers, creating the subprime market that ultimately imploded, taking the economy with it.

Cornell's Benefit Office and TIAA-CREF encourage employees to make appointments with a TIAA-CREF or other financial adviser to ensure that your personal financial future is on sound footing. A listing of appointments can be found at http://www.ohr.cornell.edu/whatsNew/whatsNewBenefits/benefitAppts.html.