ohn W. Rogers Jr., chairman and chief executive officer of Ariel Capital Management LLC, Chicago, worked as a vendor during high school and college at Wrigley Field, home of the Chicago Cubs baseball team, and Comiskey Park, home of the rival Chicago White Sox.

    Hawking Cokes and hot dogs in the stands during games, his appreciation of the value of money was shaped from those who had earned it—the fans. A graduate of Princeton University, Mr. Rogers founded Ariel in 1983 and developed its fundamental value equity investment style. The firm has become a household name among institutional investors, and has $11 billion under management.

    Mr. Rogers spoke about how he thinks investors should behave during times of market crisis and what he believes the future holds for stocks.

    John Rogers: I tell the CEO, CFO, the person who oversees the plan to make sure you have a [chief investment officer] who really is laser-focused on the markets, someone who has passion for the markets, and someone who has a gift of picking portfolio managers, because that is a really hard thing to do. … So you want to make sure you’ve got that in your leadership overseeing your pension plan. I tell people if you are not sure you’ve got someone like that, then I think maybe you should think about outsourcing it.

    CBO: What should plans with some sophistication do now in regard to their strategic investment policy and asset allocation?

    Mr. Rogers: I think it's critically important in times of most turmoil and most dramatic shifts for pension fund executives to stay calm while everyone else is crazed and unnerved. It's important to not make big dramatic moves during the midst of this type of historic, once-in-a-lifetime panic that’s out in the market. The amount of fear out there is extraordinary. So it is … critical … to not make any dramatic shifts or changes, while everyone around you is getting unnerved in this environment.

    CBO: So pension funds should stay the course?

    Mr. Rogers: I do think if anything at this time it is probably a time to make sure you are being true to your asset allocation vision. You want to stay the course. By staying the course, it also means if all of a sudden you are underallocated in domestic equities because of the [market] decline, having the courage and conviction to be buying while everyone else is selling. I think it is really important and fits in nicely with what Warren Buffett said … reminding [investors] to be aggressive when everybody else is nervous. It is a powerful point he made. It’s good to remind yourself of that during a period like this.

    CBO: You feel strongly a fund should rebalance?

    Mr. Rogers: Exactly. It's the most uncomfortable thing to do. It's the right thing to do. You have to be able to take advantage of the bargain prices, the cheapness of [equities] as you rebalance.

    CBO: Don’t change your strategic plan?

    Mr. Rogers: Yes, that's what I want to make clear. By staying the course, that means you should be rebalancing with discipline and consistency. Don't sit on your hands waiting for the dust to settle. You will miss the opportunity. That’s why you have that strategic plan to have that asset allocation in place so when the headlines do get crazy and are screaming and fear is out there, you have your plan … and are able to execute around it while other people are out there flailing around not knowing what do. But if you have that direction, stick with it. You will be really happy you did two, three years from now.

    CBO: What do you see in the market going forward?

    Mr. Rogers: It will take awhile [to rebound]. I don’t think it will be an instant snapback. But I do think … this is the cheapest I’ve seen the stock market in the last 25 years and I really believe when you can take advantage of these bargain prices you are going to have a nice recovery from here. And so I wouldn’t be surprised [to see] the market bounce back 10% to 15% and then slowly but surely build a base as the economy recovers. As always, the market will come back and recover well before the economy actually does.