By Kathianne Boniello
Influential Wall Street strategist Abby Joseph Cohen kicked off a conference on financial planning Saturday at St. John's University with a warning that any major change in fiscal policy after this year's presidential election could damage the nation's economy.
“My concern in the next year is not the perfection of the U.S. economy,” Cohen told the audience during her keynote speech. “I've always said I was concerned about the year 2000 problem -the presidential elections.”
Cohen is the managing director and chairwoman of the Investment Policy Committee at Goldman Sachs & Co., the investment banking firm. She is considered one of the most powerful economic analysts in the country whose forecasts can move markets much the same way as comments by Federal Reserve Chairman Alan Greenspan.
In the early 1990s “no other nation on the planet had fiscal policy as bad as ours,” she said. “In the last four years we have had very good economic policy.”
Cohen's spirited presentation riveted the audience and she was frequently quoted in workshops given by financial planning experts throughout the day.
She lives in Jamaica Estates and graduated at the top of her class from Martin Van Buren High School in Queens Village before attending Cornell University.
Cohen said that while the Standard & Poor's 500-stock Index was undervalued by nearly half in the early 1990s, the broadest measure of stock market performance was no longer undervalued at the end of 1999.
“We think stock prices will grow,” Cohen said, “but in a more normal fashion – 10 percent, not 22 percent.”
She said that “the right price” for S&P 500 would be about 1525 by the end of 2000 vs. 1400 in 1999.
Cohen outlined her views of the global economy at the third annual “Making the Most of Your Money” financial planning conference, sponsored by the Financial Planning Association of New York, the Financial Services Institute at St. John's University and the Times/Ledger Newspapers. Cohen and state Comptroller H. Carl McCall were keynote speakers at the event.
Financial specialists gave a series of workshops throughout the day on topics such as “Worry-free Retirement,” “Navigating the Mutual Fund Maze” and “Wills and Trusts.”
Austin Zakari, event manager for the conference and head of the Classified Department at the Times/Ledger, said the more than 500 people who attended the conference “got thousands of dollars worth of financial information for a $5 entrance fee.”
All proceeds were donated to St. Mary's Hospital for Children in Bayside, which collected about $1,100 from the event, Zakari said. Some 42 local businesses also participated by giving workshops or sending representatives.
Borough President Claire Shulman officially opened the event and declared the week of March 18 “Financial Planning Week” in Queens.
While Cohen, a macroeconomist who studies broad, long-term trends in the global market, gave her assessment of the future of the U.S. economy, McCall focused on the fiscal policies of the state.
“I really wish our leaders in Albany would come to a conference like this one,” McCall told the audience during his speech in the early afternoon. “We face tremendous and growing debt and we aren't putting enough money away for a rainy day.”
McCall, a former state senator, Board of Education president, and United Nations ambassador, has been comptroller since 1993.
As comptroller, McCall is the state's chief financial officer. He also spent nine years as a vice president at Citibank before becoming comptroller.
McCall said that while the state was rolling in budget surpluses, political leaders were doing nothing to attack the government's debt.
“Paying off debt,” he said “is the best investment you can make.”
While Cohen, who is traditionally bullish on the economy, praised the nation's financial state in general and gave a broad outline of where she expected the economy to go, she did not identify any specific stocks to follow.
She called for a continuation of lowered trade barriers as a way to bolster the international economy.
Cohen said the recent volatility in the market, where prices have soared to record heights and then plummeted in the same week, was part of what she described as normal growth.
“In the last year or so as the market moved up to fair value,” she said, “the volatility has doubled.”
Cohen and McCall praised the conference and its goal of educating people about financial planning.
“I think the event is terrific,” Cohen said. “I think they want them to make thoughtful decisions and the way to do that is through educating people.”
McCall said the conference was “very important. People are really thirsty about information for financial planning. They need this.”