Being an investor is getting scary
TEXT OF STORY
Kai Ryssdal: There’s some discussion out there about whether or not we might be in a recession already. To judge by the stock market, the bad times are upon us now: since New Year’s the Dow has dropped nearly 10 percent.
That’s almost enough right there to official qualify as a market correction.
Of course, if you ask money managers, they’re saying what they always say: Sit tight and wait out the storm.
For a lot of Americans, sitting tight just doesn’t feel like an option. Stacey Vanek Smith reports.
Stacey Vanek Smith: Being an investor these days is getting downright scary.
Steve Goldstein: I’m riding it out but I’m reasonably worried right now.
Steve Goldstein is a retired government employee and he’s living off of his retirement account. Its value has dropped about 10 percent since last year. He says the markets have him in a bind:
Goldstein: If it does drop preceiptiously, I’m not sure what I can do, because once it drops precipitously, it doesn’t make sense to get out.
But a lot of investors think it does right now. They’ve started yanking money out of stocks and stashing it in safer havens like Treasury bonds. Musician Ed Boyle has moved a major chunk of his savings into gold:
Edmund Boyle: I’m not buying gold to make a profit, I’m buying gold as a hedge and I hope I’m wily enough to make money someplace else… it’s just I don’t know how right now.
And some people are opting for their matresses. Retiree Margaret Cline Harmon moved her savings out of stocks about 9 months ago. If she hadn’t, her portfolio would have lost more than half its value. She says, she won’t venture back into the market anytime soon:
Margaret Cline Harmon: I really don’t think it’s going to be safe to put your money in it for 5 or 6 years, but once is stabilizes, I might.
Micahel Farr is chief investment officer of Farr Miller and Washington. He says there aren’t a lot of Margarets out there… yet.
Micahel Farr: These emotional mindsets evolve. I think that things could get worse.
Farr says people shouldn’t indulge their fears. He says this slump may last for a few years, but the markets will recover.
Farr: Be dispassionate and think about the long term. And if you don’t look now, that would be a really good strategy.
Also known as the ignorance is bliss strategy.
I’m Stacey Vanek Smith for Marketplace.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
