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Identifying Investment Opportunities
Inman, who also serves as the associate dean for faculty and research, thinks future crises could be averted-or at least ameliorated-by improving the public's financial literacy.
"We need to do a better job in educating individual investors [about] how to manage their retirement funds, because, increasingly, it's drilled down to the individual to set aside enough money while they're working to carry them through their retirement years," he says.
Inman helped to develop a financial literacy quiz for the Katz School's Web site and says people can easily get the basics of rational investing through the sites of such popular companies as the Vanguard Group, Inc. and Fidelity Brokerage Services LLC.
Although those resources are free and readily available, the problem is that few people place a priority on their own financial education, he says.
"What it really comes down to is that people just don't have time to do it-yet it's so critical," Inman notes.
Current research shows that women are more likely to make substandard investment decisions than men, and the reasons for that are worthy of further investigation.
While many good investment opportunities exist in the market, Inman believes that "a lot of people are very gun-shy, because they don't have any sense that we've reached bottom."
His advice: Think about the long haul, not simply the current crisis. While he would personally avoid financial services and the automotive industry in the existing climate, he does note that some retailers are attractively priced.
Inman coauthored research that was highlighted in U.S. News & World Report that found inexperienced investors who faced too many choices in their 401(k) plans wound up taking on more risk than they would have if they had had fewer options.
Inman recommends that people sit down, either alone or with a financial advisor, and develop an asset allocation strategy before looking at any of the available choices.
Like Sukits, Inman does not favor additional regulation, which he believes will risk future success. In fact, changes to the infrastructure of certain industries-with automakers being a prime example-will be a necessary part of righting the economy, he says.
The auto industry has been poorly managed and saddled with labor that has entitlement-rich contracts, says Inman. Both of those would have to change for a bailout to succeed.
"Changes are painful, but longer term, that's what makes your economy a success," he says. "The key is bolstering consumer confidence. The sooner we get that back, the sooner the economy will be heading in the right direction," Inman says. "Right now, we're in a downward spiral. Eventually it will bottom out, and the course will be corrected. But boy, I hope it happens sooner rather than later."
