WSJ -- Readers Share Thoughts About the Bear Market
December 18, 2001
Getting Going
Readers Share Thoughts
About the Bear Market
By JONATHAN CLEMENTS
The bear market is over. The pain lingers on.
Since the Sept. 21 market low, stocks have rallied more than 20%, before recently
giving back some of their gains. That means we are technically in a new bull
market. But as you will discover from the letters below, many investors feel like the
bear never left.
Two weeks ago, I asked readers how their thinking had changed after two years of
slumping share prices. Hundreds of folks wrote in. From that outpouring, I culled
the dozen comments below, which have been edited for brevity.
* * *
Small Blessings: I closed all my online brokerage accounts and switched to a
mutual fund with a 60% stock-40% bond mix. It gained 2.4% this year. I never
thought I would be bragging about a 2.4% gain. But I will take it.
Robert Eckert, Boothwyn, Pa.
* * *
Fighting the Fed: I made the mistake of not taking the Federal Reserve seriously
back in 1999 [when it started raising interest rates]. When the Fed next decides to
end the party, I am going to earmark my savings for a money-market fund.
Frederick D. Hunt, Jr., Rochester, N.H.
* * *
Dollars and Sense: There have been a huge number of bankruptcies lately, most of
which the stock market seems to ingest without much reaction. The bear market
makes me realize that, in both good times and bad, the market is often just plain
nuts. And this is where I'm supposed to put my retirement dollars?
Vincent Crisci, New York
* * *
Mission Impossible: I have learned that it is impossible to be too cynical. One is
likely to be correct 99% of the time by believing the precise opposite of what the
windbags and snake oil salesmen loudly proclaim. It is too depressing for words.
Bucky Rulon-Miller, Gladwyne, Pa.
* * *
Paying Yourself: I advise my retired friends to determine the minimum income
they need and then generate that by investing in either an immediate annuity or a
Treasury bond fund. Once they have that stream of income, they can do whatever
they like with the rest of their money, including playing the stock market.
Vijay Rohatgi, Sterling, Va.
* * *
Unthinkable Thoughts: I trade futures for a living. Professional traders have no
monopoly on profitable strategies. What we do have is the discipline to limit what
we are willing to lose. I can assure you from painful experience that, if you do not
have a plan in place before the unthinkable occurs, you will be unable to act when it
happens.
Ron Pearrow, Dallas
* * *
Long Odds: Although I have been tempted during the last few years to open a
brokerage account and trade individual stocks, I'm glad I haven't. If top analysts
can be duped by Enron-style fiascoes, what chance do regular investors have?
George Papadopoulos, Salem, Mass.
* * *
Advice Ignored: I had an investment adviser tell me in 1999 that I had way too
much money tied up in one company, Dana Corp., then my employer. I said I
would take care of it. Did I? No, I was waiting for the share-price drop to reverse.
Instead, I watched the price tumble.
Stan Owens, Rockford, Ill.
* * *
Growing Up: We tech-stock junkies were like teenagers who think they're
immortal. Now, we know better. I no longer fear a market crash, because I've
survived one. I know now to take profits on a regular basis, to be patient and to
swallow my pride and take losses when the market turns against my investments.
Sara Stevenson, Austin, Texas
* * *
Shopper's Paradise: I consider this bear market a sale. I am able to buy more
shares with the $1,042 I put away each month. I hope, for my retirement's sake,
that the bear continues to roar.
Rene Barajas, San Antonio
* * *
Padded Mattress: I retired at the worst possible time, February 2000. Fortunately,
I had enough cash, which I can use until my other investments kick in. Little did I
realize how critical that aspect of my plan would prove to be. It allows me to sleep
at night.
Roy Langhans, Cockeysville, Md.
* * *
Plowed Under: I took profits in a very disciplined fashion in tech stocks as they
went up, never letting a stock double in price without selling half of my holdings.
My mistake: I often plowed the proceeds back into the tech sector. It turns out the
biggest risk was sector risk.
Gary T. Johnson, Chicago
* * *
With both Christmas and New Year's falling on a Tuesday, the next Getting Going
column won't appear until Jan. 8.
Write to Jonathan Clements at jonathan.clements@wsj.com
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