Newspaper article THE JOURNAL RECORD

Fear of Zero: Portfolio Managers Try to Calm Employees with Energy Stocks

Newspaper article THE JOURNAL RECORD

Fear of Zero: Portfolio Managers Try to Calm Employees with Energy Stocks

Article excerpt

OKLAHOMA CITY - Stock portfolio managers typically advise patience in the face of market volatility. After all, experience shows that business sectors tend to turn up again for every downfall.

But waiting hasn't seemed like much of a choice lately for some former energy company employees heading into retirement while their unexercised stock options are losing value.

"At that point, it's the emotional part you have to manage," said Rick Hadrava, senior vice president at Raymond James Financial Inc. in Oklahoma City. "And that comes from sitting them down and asking thoughtful questions: What was the objective of that deferred compensation? What are your goals?

"Different segments of the economy have their own cycles," he said. "I've seen this in technology, for example - you can go back to the dot-com bust when options and restricted stops were regularly paid out. You have to get clients to step away from their emotions to figure out what it all means."

Crude oil prices fell Tuesday following the International Energy Agency's warning of possible sell-offs as stockpiles are expected to rise to record highs by the middle of this year. The IEA also reported that production from members of the Organization of the Petroleum Exporting Countries will hold steady this year. The U.S. Energy Information Administration was also cautious in its 2015 and 2016 domestic oil production projections.

The overall effect on the U.S. stock market was a drop in share prices in that sector. Energy was the only portion of the Standard & Poor's 500 index that slid Tuesday - 0.7 percent - while all other sectors in the index rose. Crude oil prices kicked off the year at six-year lows amid strong global oil supplies.

Some energy companies have been having trouble lately. SandRidge in Oklahoma City, for example, announced this week it will cut its rig count in Oklahoma and Kansas by nearly 75 percent. In early January, company Chief Executive and President James Bennett said the company was responding to market conditions.

Hadrava and other wealth managers would not discuss which companies offer stock options or restricted stock as part of their employment compensation packages. …

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