DENVER -- The announcements by two of the country's bulge bracket firms Monday left many uncertain how they would be affected.

In the short term, market indexes plunged with losses posted in several categories.

But the individual investor should not panic, according to a local professor.

"A lot of analysts and forecasters are saying that we're not going to be out of this mess until the end of 2009," said Dr. Mac Clouse, finance professor at the Daniels School of Business at the University of Denver.

Clouse said with Bear-Stearns having severe financial problems earlier in the year, followed by news from two of the other large financial institutions, choice is likely to be one casualty.

Increased fees might be one result, Clouse said.

"This one gets into the confidence in our financial economy and financial institutions. And when the big blue chips start to have problems, then you have worry about maybe some of the smaller institutions," Dr. Clouse said.

His big warning is for pension holders and contributors who may've been unwittingly entangled in mortgage-backed securities.

"Yes, they should be worried. Because these are the big institutions that have been investing in some of the derivative products that Lehman Brothers and Merrill Lynch and the big financial institutions have been selling to them," Dr. Clouse said. "So Merrill Lynch is buying a bunch of mortgages, putting them together into a package and selling them to the institutional investors, like the retirement funds. It's scary."

Spokespeople with pension administrators for firefighters, police officers, Denver teachers and PERA -- the Public Employees' Retirement Association -- all said they were too busy trying to digest Monday's news and search for any risk exposure to comment publicly.

"You've got to have something in place that gives you confidence on a day like today," said John Claxton, of RBC Wealth Management.

Claxton urged individual investors to diversify funds into different asset categories.

"It's going to be a tough period, I think we're well into it, I think we're closer to the end then we are to the beginning," Claxton said.

The reshaping of the Wall Street landscape is being watched with a keen eye by people hoping to protect their 401k nest egg.

"It does get your attention," said Bill Jewell, a city of Lakewood employee four years from retirement.

“The uncertainty of what's happening with those financial institutions is a big issue," Jewell said.

Jewell added his stress level was down Monday knowing his son-in-law is a financial analyst.

Merrill Lynch appears to have value to Bank of America based on the expertise of its financial advisers, say market watchers.

Lehman Brothers operates a large loan office in the 10000 block of Park Meadows Drive.

Impact there was harder to gauge.

"They had some layoffs last January. They've always played it close to the vest (on) exactly how many people they've got here," said Renee McGaw, reporter with the Denver Business Journal. "Probably the Colorado employees of Merrill will escape most of the cost cutting they plan to do. Lehman....it's anybody's guess."

7NEWS reporter Lane Lyon contributed to this report.