Pssssssst... Anyone know this one guy they interviewed? <gggg>
dailynews.netscape.com
NEW YORK (Reuters) - Investors are watching their portfolios shrink as the stock market has crumbled after last week's attacks on the United States, but many people are staying put.
"I'm not dying to jump in and buy and I am not dying to jump in and sell," said Page Clark, 30, of South Boston, Massachusetts. "I just want to see what's going to happen, especially over the next few days."
Major U.S. stock market gauges fell further on Friday, amid a devastating week for stocks following the Sept. 11 attacks on the World Trade Center and the Pentagon. And mutual funds are poised for what could be one of their worst years ever, with the average diversified stock fund down nearly 26 percent year to date through Thursday.
But institutional sellers and investors who trade on margin -- buying stocks with money borrowed from a brokerage -- are likely responsible for the sell-off, not individual investors who have most of their savings wrapped up in long-term retirement accounts, according to financial planners and industry observers.
"We have not heard of big redemptions to date," said Louis Harvey, president of Boston-based mutual fund research firm Dalbar Inc. "Quite frankly, I think most investors realize the insanity of selling into this kind of market."
In midtown Manhattan in New York, several investors said they were nervously hanging tight.
"I closed my eyes this week," said newsstand owner Suresh Patel, gazing up at the Nasdaq Stock Exchange sign as he walked through Times Square.
"I'm losing lots of money," said Patel, who said he has about $100,000 invested in stocks. "I'm worried because I don't know what's going to happen, but my broker called, and I told him I don't want to do anything right now."
Donna Ellington, a 40-year-old butcher at Dean & Deluca in the Manhattan neighborhood of SoHo, said she has lost roughly $4,000 this year invested in several Fidelity funds.
"I'm nervous," she said, her Yankees baseball cap pulled down tightly over her eyes. "I think about the market, but I'm not going to pull out. I'm in it for the long haul."
In Boston's financial district, discount brokerage offices were empty Friday morning. All but one of the dozen or so sleek black terminals at E-Trade Securities on State Street were deserted. Not even one customer was visible at the TD Waterhouse and Charles Schwab offices on Post Office Square.
Investors in Boston said they expect it to take years before stocks approach their pre-attack levels. But they think this is the wrong time to cash out.
"I haven't done anything," said Paula Crumrine, 32, of Franklin, Massachusetts. "I don't really have a reason to act now, thankfully, and I think over the long term things will get better."
FUND WITHDRAWALS
Big mutual fund firms, such as The Vanguard Group, said this week they have received some increase in telephone calls from concerned investors, but they have not seen a large increase in fund redemptions.
Some investors are selling, though. T. Rowe Price Group Inc. (TROW.O) said on Friday that investors have withdrawn money at modest levels with the pace picking up slightly at week's end.
Choice Investment Management, a small fund firm with about $90 million under management, also said it has recorded a small amount of net withdrawals.
Last week's attacks have taken the world into "uncharted territory" and "I kind of get the feeling most of them (shareholders) are not sure what to do," said Greg Drose, the firm's chief operating officer.
A net $9.4 billion -- only a fraction of overall fund assets -- was withdrawn from stock mutual funds in the first three days since U.S. stocks resumed trading on Monday, according to estimates by fund tracking service TrimTabs.com. In a five-day period ending Sept. 5, net withdrawals totaled $10.7 billion, the Santa Rosa, California-based research firm said.
Most mutual funds are struggling this year. Among the most popular funds, Fidelity Magellan (FMAGX.O) is down 25.1 percent year to date, while the Vanguard 500 Index (VFINX.O) is off 24.8 percent, according to research firm Lipper Inc.
Of the 25 largest mutual funds tracked by Lipper, the only one to post a year-to-date gain is the $47 billion PIMCO Total Return fund -- a bond portfolio. That fund is up 8.5 percent.
Despite sagging performance of most investments, financial planners say they've seen no capitulation among their clients.
"Older investors who need to make sure of their income stream may be making some moves, but I do believe, especially with twentysomething investors who've made a lot of money the past three years, there is more of an urge to remain in the market and be patriotic," said Tom Grzymala, a certified financial planner in Alexandria, Virginia.
But some investors are selling riskier stocks that have added to their losses in recent days, Grzymala said.
"People definitely are deciding that it's time to start selling those dot-coms that will never come back," he said.
Seriously these are tough times for almost anyone holding long term positions with expectations for a recovery. I personally expect that if we can show military success in the form of capturing (or taking out) Osama bin Laden that the market will rally back. Yes we are in danger of further terrorist activity but American's will not be cowed into diminishing our personal freedoms. We will return to traveling in great numbers. The economy will recover. The bottom in 2001 may utimately be looked at as a fantastic buying opportunity.
The trouble is we do not know if we have or when we will see the bottom
RtS |
