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Nasdaq's Berkeley Asks For Investor Confidence

The vice chairman of the tech-laden exchange told a New York business group that patient investing represents the most likely road to economic recovery.
The road to a stronger economy will be paved by continued but patient investment, government intervention, and hard work, Nasdaq vice chairman Alfred Berkeley III Tuesday told members of the New York eCommerce Association, a network of area businesses. Berkeley said it's difficult to anticipate how the economy will respond to the Sept. 11 attacks, but he has a pretty good idea of how to begin reversing the ongoing slump.

What will help most, Berkeley says, is long-term investing, rather than speculative buying and selling. He characterizes the financial market as being populated by long-term investors and speculators who introduce volatility and risk into the market. "From the investors' perspective, the enthusiasm may have gone out of the market, but speculation is still there," he says. It's this speculation, and the presumption that investors have to gamble to win, that "has hurt liquidity in the market," says Berkeley.

The right model is long-term investing that takes into account corporate strategies that could take a while to produce results. This mindset is needed to weather not only the lingering economic hangover, but also the recent disruptions to business and investors' fears of a wartime economy. For investors to get off the sideline, Berkeley says, "fear has to be balanced by a little more greed."

Analyst Sam Albert, president of New York management consulting firm Albert Associates, says the economy can swing upward on the strength of technologies that ensure security, privacy, and information collaboration. Says Albert, "In the war against terrorism, the key weapon will be technology."