Two years ago, Walnut Creek retiree Phyllis Ceaser and her husband ignored Bob Brinker of KGO radio, who told listeners to dump stocks, that the market had peaked.
The pundit was right, and Ceaser confessed the couple wished they had heeded the advice. "It's a big regret," she said.
So when the market dived Monday, Ceaser was definitely paying attention. "Of course I'm worried -- I'm not crazy!" she said Monday after checking on her portfolio at Charles Schwab in Walnut Creek. "Half our savings is in stock, and it used to be a lot more."
Still, the former art instructor is planning to sit tight for now, reasoning that she can make money on stocks over the long term. "You have to hang in there," she said. Ceaser said she will feel more comfortable holding her ground if Congress passes tough new accounting regulations. President Bush's recent proposal "obviously hasn't been enough" to calm investors in the wake of accounting scandals at Enron and WorldCom, she said, citing the market slide.
Ceaser is a lot like other local investors surveyed Monday. By and large , they plan to maintain and even expand their positions in the stock market despite recent volatility. To be sure, some said they are keeping a close eye on their stocks and considering a shift to bonds or to foreign stocks. But all were holding their ground for now, sometimes to avoid taking losses, sometimes as part of a long-term buy-and-hold strategy and sometimes because stocks seem like bargains.
Robert Burton, 42, said he is far from drawing on retirement funds, and tries not to think too much about day-to-day market movements. "I figure that, because I'm young, I don't have to worry about what's happening today," the Clayton resident said. In fact, a down market might actually be a good thing for Burton, since he is accumulating stock in his 401(k) retirement plan. "You have more to gain on the upswing," he said. "It's probably a good time to buy stock, actually."
That's Jim Burns' inclination. "I might start buying real soon," the 48-year-old Walnut Creek resident said. "I could replace some of my losses." Burns said about a quarter of his retirement portfolio is in stocks and is down 20 percent to 30 percent over the past two years. He said he will either "move in aggressively" or "dabble around and bottom feed" on cheap stocks, depending on the strength of federal accounting reforms.
Ron Peat also has accumulated losses in mind when he thinks about his portfolio. Peat was a rate manager at Pacific Bell before retiring. Now he is trying to jump-start a new career as a massage therapist and fitness health educator, but his mind keeps wandering back to the market. The stock portion of his portfolio fell 14 percent in the last two months alone, he said.
"I hold my breath every day when (the market) opens," he said. "I'd pull it out right now except I've lost enough that I need to sit tight. I'm hoping for an economic rebound."
Daniel Nelson, 67, has given up on that eventuality. "No one knows when the low is going to hit," he said. So the Concord retiree is in the process of converting his variable annuity, which rises and falls with the market, to a fixed annuity, which does not. "At least you're making three percent and not losing money," he said. He will leave a small percentage of his money in mutual funds, however.
Allyson Farry of Pleasant Hill is keeping her retirement money in stocks. But recent woes in U.S. markets have her looking abroad, particularly to mutual funds that invest in European stocks. Farry said she is in the process of transferring some of her assets to international funds.
At the other end of the risk spectrum, Walnut Creek CPA Al Riley has all of his money in Treasury bonds. Riley said he liquidated his stocks when the market hit its peak in March 2000. He says the stock market was overvalued then and is overvalued now, although he holds open the possibility that if it falls much further he may pick up some equities again. "You have to watch all the ratios," he said.
Jean Spitzer, 78, has seen enough bear markets to remain relatively unfazed by stock volatility. The market, according to the Berkeley retiree, "just goes up and down all the time. But I'm just convinced it's the only place to be."
Ryan Tate is a general assignment reporter. Reach him at rtate@cctimes.com.
Caption: Ron Peat of Walnut Creek is hoping for an economic rebound after his stocks fell 14 percent in the past two months. (Jose Carlos Fajardo/Times)
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