CHICAGO (AP) — Cheryl and Jim Friedman, retirees in St. Louis, had two-thirds of their retirement money in the stock market in 2008. When the financial crisis struck that fall and stocks lurched up and down with nauseating speed, Cheryl, a former accountant, pulled the money out.
Fearing that the next crisis was always around the corner, they have kept most of the money out. It's parked in a money-market account earning a meager 0.1 percent per year. The Friedmans watched in agony as stock prices doubled over the past three years.
"I felt that either the world's going to end or it's the smartest time ever to invest," recalls Harvey Bookman, 60, of Brooklyn, N.Y., who has made up his initial market losses many times over by buying when stock prices were low.
Bookman bought shares of Avis stock for 41 cents apiece on March 4, 2009, five days before the bottom. He sold them in September 2009 for $11.92 apiece. Total profit, minus commission: $46,026.
Joe Kelly, a financial planner in Bordentown, N.J., said one of his clients, an office manager in her 50s, yanked all $200,000 of her savings out of stocks and into cash one night in January 2009, against his advice.
Temporary peace of mind turned to angst as she missed a historic rally.
But Sachs, a retired computer consultant, soon tiptoed back into the market, buying dividend-paying blue chips and some mutual funds three years ago. Today his portfolio is well above where it was before the crisis began.
But his optimism is muted because of what he endured in 2008.
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