Wall Street Drop Worries Investors
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SEATTLE (AP) _ Karl Dight is still more than 20 years from retirement, but the stock market’s recent decline has him worried about his future.
``I try not to freak out,″ said Dight, 42. ``I just wonder when my retirement’s going to happen.″
Dight is among the thousands of average investors across the country who are changing retirement plans, rethinking investments and losing faith in a stock market that is suffering through one of the worst downturns ever.
On Monday, the Dow Jones industrials closed down 234.68, or 2.9 percent, at 7,784.58, its third straight triple-digit decline and its lowest close since Oct. 8, 1998. The Nasdaq and S&P 500 are at five-year lows.
Philadelphia attorney George Young winced when told about Monday’s market dive.
``It’s very upsetting, very distressing,″ he said, even though he’s watched the market ``mostly from the sidelines.″
``I think the investing public just doesn’t have any faith,″ he said. ``It’s that mob psychology, get out of it before it gets any worse.″
Around the country, though, many investors are resisting the urge to get out.
``I decided to ride with it,″ said Bill Wiggenhorn of Philadelphia. ``I’m not putting any more money in, though. I have enough in diversified holds that I think I’ll be able to weather it out.″
Allyson Damon, a paralegal from Phoenix, said even though some of her stocks are now half their original value, she’s not selling.
``I’m trying to keep everything in focus and not panic,″ she said. ``I’m hoping in the next couple of years I’ll be back where I was. In the meantime, hold on to your hat.″
Michael Beaulieu, an investment adviser in Hartford, Conn., said that although he too is losing a bundle, he’ll take the same route.
``I’m a long-term investor, I don’t need any tax losses,″ he said. ``This is going to be a tough quarter.″
Some investors are looking at the low stock prices as the perfect time to buy.
``I’m actually playing with the idea of buying some stock,″ Butch Hedges said in Cleveland. ``We’re not business savvy, so I’d have to do some research. But 90 percent of it is luck.″
Hedges, who works for manufacturer Eaton Corp., did acknowledge he is in a better position than those closer to retirement age.
``Since we’re not planning to retire for 15 years, it doesn’t really affect us,″ the 45-year-old said.
Others don’t have as much time to rebound.
Chris and Marti McCarty, who were visiting Phoenix from Eddyville, Ky., said they are more worried about older members of their family than themselves.
``They’re losing thousands and they’re so close to retiring,″ Marti McCarty said. ``They’ll still retire, but I wonder about the quality of it.″
Recent corporate accounting scandals, most notably at Enron and Worldcom, have investors looking for reform.
``It’s a succession of things _ it’s WorldCom, it’s Enron, it’s Tyco, it’s the public seeing the guy at the top walk off with billions and billions of dollars while their companies go south,″ said Walter Benson, an attorney from Syracuse, N.Y. in Hartford on business. ``Too many people got accustomed to overnight riches.″
Eric Schwartz, an accountant for a Philadelphia hotel company, agreed that the public needs to evaluate its relationship with the market.
``I still think it’s a couple thousand points overvalued,″ said Schwartz, 38. ``I think there’s a large proportion of people living beyond their means, and now it’s time to pay the piper. It’s everybody’s perception that it’s this bad. It’s still, what, 8,000 points? I remember when it was 3,000 points.″
Associated Press writers Jennifer Kay in Philadelphia, Noreen Gillespie in Hartford, Paul Singer in Cleveland and Foster Klug in Phoenix contributed to this report.