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Strategies & Market Trends : Making Money is Main Objective -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (1137)	4/19/2001 1:14:35 AM
From: Softechie	Respond to of 2155

Some bears plan to hibernate through Wall St rally By Martha Slud NEW YORK, April 18 (Reuters) - While U.S. stock markets rallied sharply on Wednesday following the Federal Reserve's surprise rate cut, some individual investors said they were not ready to come out of hibernation yet. ``They say when you hit bottom that's the best time to invest, but I still see a choppy road ahead,'' said Cyrus Nallaseth, 44, an immigration lawyer from New York. Nallaseth is worried about disappointing corporate earnings and rising layoffs, and said he has no plans to make any changes to his portfolio. ``A rally doesn't do anything'' for people who have been laid off or seen their assets evaporate, he said. ``They have already lost their houses and their savings.'' The Dow Jones industrial average(^DJI - news) jumped nearly 400 points, or 3.9 percent, to close at 10,615 Wednesday, while the Nasdaq composite(^IXIC - news) surged 156 points, or 8.1 percent, to 2,079. If the rally continues in the coming days, it could encourage many investors to come back into the market, financial experts said. The rally may have a ``bandwagon effect'' on many investors, said James W. Eyres, a certified financial planner in San Francisco. ``People don't want to be left behind.'' But many investors have racked up big losses over the past year. The average U.S. diversified stock fund fell 13.1 percent in the first quarter, on top of a 1.67 percent decline in 2000, according to fund tracker Lipper Inc. Investors yanked $3.07 billion from U.S. stock mutual funds in February, according to the Investment Company Institute, a mutual fund trade group. March is on track for an even worse showing. Investors pulled roughly $24.7 billion from stock funds last month, according to an estimate from Trim Tabs, a Santa Rosa, Calif. research firm. If March does show a net outflow when final figures are released, it would mark the first time since the Persian Gulf crisis in August and September 1990 that investors withdrew more money out of mutual funds than they deposited. Amid the current market turmoil, many individual investors have been stowing money into cash and bonds. Wednesday's rally could be the catalyst for investors to put that money to work in mutual funds, experts said. The Fed's surprise rate cut ``is the kind of shock that mutual fund investors who had their money sidelined were waiting for,'' said Louis Harvey, president of fund research firm Dalbar Inc. ``It's only the most nervous investor that wouldn't be at least ready to begin to plow back into the market.'' But many investors do appear nervous, saying the weak economy and job cuts are putting a cloud over the market. A one-day rally ``doesn't impress me,'' said William Gattsek, of Brooklyn, N.Y. ``I think it's going to take a while for confidence to come back.'' Gattsek, 42, was laid off from a software manufacturing firm about six weeks ago. He cashed out of almost everything he had in stocks and funds after he lost his job, and used about $20,000 of the money to pay for a ``Sweet Sixteen'' birthday party for his daughter. ``I'd rather spend it on this party than lose it in the stock market,'' he said. ``If I were to put money in the market, I'd pull what little hair is left out of my head.'' He said he'd consider buying stocks again if he sees some momentum build in the market. ``Two weeks worth (of market gains) maybe would raise an eyebrow,'' he said. ``Two months of consistent growth would probably return me to investing.''