Brooklyn financial exec gives advice about government shutdown and the market

October 4, 2013 By Raanan Geberer Brooklyn Daily Eagle

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The federal government shutdown is not only affecting federal government employees and federal installations such as Gateway National Park, it’s also affecting the financial markets and investors.

So says Mark Seruya, a senior vice president and managing director at Morgan Stanley and a resident of Midwood.

“I’ve been in the business of managing money for 30 years,” says Seruya, who grew up in Manhattan Beach and graduated from Lincoln High School. “I’ve seen various shutdowns. This is the 17th in the past 40 years. And every time it happens, it causes disruptions in the market.

“The last one, in 1995-96, lasted 21 days. At that time we saw the economy slow down. We saw disruptions in people getting paychecks and government employees get furloughed for several weeks.”

Not only does it have an effect on people who work for the federal government, he said, it affects companies that have government contracts. Those companies are not getting paid.

The federal presence in Brooklyn includes Gateway National Park, Fort Hamilton, the V.A. Medical Center in Bay Ridge, the Environmental Protection Agency, the Metropolitan Detention Center in Sunset Park, the Social Security Administration, the federal courts, the U.S. Attorney’s Office and, of course, the Postal Service (which technically isn’t a federal agency). Some of these entities are affected more than others.

Many federal employees, according to Seruya, “are feeling the pinch of not getting a paycheck. They have to pay mortgages, heating bills, utility bills, put food on the table. They’re drawing from their savings.”

What does this have to do with the financial markets? “The stock market is mostly about confidence,” said Seruya, who has been named one of the “Top 400 Financial Advisors” by the Financial Times. “When people lose confidence, they get nervous. They begin selling stocks, mutual funds, bonds – usually, it’s a knee-jerk reaction. But people who take the longer view benefit.”

“In my group at Morgan Stanley,” he says, “we manage the funds for over 700 households. We get a fair amount of households, people who are concerned. Our message to our clientele is that they should not panic, should avoid making knee-jerk changes to their portfolios, but should also re-examine their overall allocation and speak to their advisor. Calm is always the best way to react.”

In addition, he says, a downswing in the market could be a good time to buy securities that are temporarily lower-priced.

What does Seruya have to say about the government shutdown issue itself? “I’m seeing things calming down, he says. “I expect it will be settled sometime in the near future.” However, he says, if the government does not raise the debt ceiling, there will be significant problems. “You’re talking about a whole other story.”