A Sept. 11 Prospectus

Commentary about business and finance.
Oct. 25 2001 12:39 AM

A Sept. 11 Prospectus

The folks at RearGuard tell you how to turn trauma into money.  

 

Investment Advisory From the RearGuard™ Funds

In uncertain times such as these, we at the RearGuard Funds do not need to remind our clients that homeland security starts with sound financial planning. With the flag- and Cipro-producing industries overbought, many of you have been asking about investment opportunities with the potential to prosper through and beyond the current crisis. Look no further than the grief industry.

An Industry Poised for Dynamic Growth

For centuries, the job of comforting the afflicted has been relegated to the nonprofit sector. Growth potential was limited in that services were not only typically provided by unpaid clergy but also confined to victims of tragedy or their immediate survivors. Even in major disasters such as the World Trade Center attacks, this clientele numbers at most in the tens of thousands, an insufficient market to sustain a vibrant and competitive industry. A market breakthrough occurred in the 1990s when the proliferation of 24/seven cable news and the subsequent burgeoning of the Internet made it technologically possible for closure-providing practitioners to extend their reach far beyond the limited customer base provided by the directly injured or bereaved. With the help provided by President Clinton in his role as empathizer-in-chief, they laid the foundation for a dynamic and lucrative new industry.

Large-scale grief intervention first came into its own with the 1995 bombing of a federal building in Oklahoma City. The 1996 crash of TWA 800 off Long Island gave the industry another high-profile opportunity, although airline bungling of next-of-kin handling necessitated direct intervention by the president and his spouse. The following year, however, the industry gained further credibility by negotiating 13 separate contracts with the Commerce Department to soothe employees after the plane crash death of Secretary Ron Brown. By 1997, the year of Princess Diana's death, the Washington Post reported that more than 1,600 grief counselors and services were listed in a new National Directory of Bereavement Support, colleges were offering majors in death and grief, and the 2,000-member Association for Death Education and Counseling welcomed an international crowd at its annual conference.

The year 1999 was a banner one for the industry, encompassing not only the Columbine High massacre and the death of John F. Kennedy Jr., but also the crash of Cairo-bound Egypt Air Flight 990, in which the industry sidestepped a potential PR setback. Both Princess Di and JFK Jr. also provided crucial momentum for the industry's move into cyberspace. While grief-sharing Web sites associated with their deaths were primarily of the chat-room variety, the industry's growing sophistication is evidenced by the subsequent proliferation of professionally sponsored Web sites ready to respond to solace-seekers in the wake of 9/11. (See, for example, Freedom From Fear, the Posttraumatic Stress Disorder Alliance [representing four national organizations], the International Society for Traumatic Stress Studies, and the Madison Institute of Medicine.) The instability of Web-based enterprises is well known to RearGuard clients, but the fact that these are essentially referral sites to bricks-and-mortar organizations should, in our view, alleviate such concerns.

An Exploding Customer Base

The intensity of media attention to the 9/11 attacks will itself provide huge momentum to the grief industry. EAPs (employee assistance programs) have proliferated in corporations nationwide since the attacks. Moreover, employers expect worker participation to increase even absent further large-scale terrorist atrocities. "The real fallout will happen two or three months down the road [when] everything seems normal," the head of the Washington-based Center for Loss and Grief recently told the Wall StreetJournal.

The tragedy also opened up new targets of opportunity. For example, the Associated Press recently reported that atheists feel neglected in the recent rituals of public mourning. "We are essentially being left out formally of the grieving process simply because we will not let ourselves get emotionally involved with a supernatural cause and effect," said Ron Barrier, national spokesman for American Atheists Inc.

Pet bereavement counseling is also in a nascent stage. Scattered groups, such as Rockville Pet Bereavement in Maryland, offer counseling to owners who have lost a pet. However, as WashingtonPost columnist Bob Levey has noted ("Are Our Pets Reacting to Sept.11?"), scant attention has been paid to the post-traumatic stress transferred to pets by grieving owners.

Synergy potential also exists in the untapped market of those who confess to feeling guilty because, while feeling compassion for victims and their families, they feel neither afraid nor grief-struck. Among surviving members of the World War II, postwar, and baby boom generations, the capacity for vicarious angst has often been dulled by such forgotten national traumas as the blackouts and air raid alerts of World War II, the prolonged Cold War nuclear threat, the Cuban Missile Crisis, and assorted assassinations, urban riots, bombings, kidnappings, and hijackings by home-grown terrorists. Organized counseling directed toward such clients should not only provide the foundation for an ancillary guilt industry, but also leave those treated with a heightened capacity for secondhand trepidation, thus expanding the grief industry customer base.

Caveats

In the wake of the World Trade Center attacks, a few members of the healing profession expressed skepticism that the event would produce widespread trauma. "The most common outcome of a traumatic event is still mental health. Humans are resilient creatures," staff psychologist Paul Arbisi at the Minneapolis VA Medical Center told U.S. News & World Report. Similarly, Federal Reserve Chairman Alan Greenspan recently warned a congressional committee that, "judging from history, human beings have demonstrated a remarkable capacity to adapt to extraordinarily adverse circumstances. And, I expect the same adaptability to become evident in the present situation."

Such precedents do exist. But today's Americans are far more in touch with their emotional needs. Nor do naysayers such as Arbisi and Greenspan reflect the majority view. More typical is that of Alan Wolfelt, a grief counselor in the Colorado Medical School's family medicine department. Speaking to a Wall Street Journal reporter shortly after the attacks, Wolfelt observed that "people are searching and yearning for ways to mourn. It's important to grieve not only independently but also communally."

The grief industry has also benefited from the absence of governmental intervention. A few lawmakers have proposed the establishment of a Federal Emotional Trauma Administration (FETA) that would not only oversee the private industry but also compete in service provision. In RearGuard's view, such intervention is not only undesirable but, in light of the prevailing anti-regulatory environment, unlikely.

Finally, even in so promising an industry as grief, no single stock can be immune from the vagaries of the market. That is why we are recommending that our clients diversify their holdings by purchasing shares in a new fund recently launched by RearGuard. "As Americans did 60 years ago, we have entered a struggle of uncertain duration," President Bush said at a memorial service for victims of the attack on the Pentagon. "But now, as then ... we have the patience to fight and win on many fronts." In view of the grief industry's proven contribution to the strength of our nation, we have named our grief industry portfolio the FDR/Churchill Fund, knowing that its creation would bring a tear to the eye of each of these great wartime leaders of the past.

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