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CNN Today

Market Drops Frightens Retired Investors

Aired December 22, 2000 - 2:34 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

NATALIE ALLEN, CNN ANCHOR: The markets have taken investors for a wild ride in 2000. The closer you are to retirement, the more you needed a good set of shock absorbers this year.

CNN's Frank Buckley has that story now from New York.

(BEGIN VIDEOTAPE)

FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): If your retirement money was riding on the stock market, you'd understand this exchange at one New York City brokerage firm.

UNIDENTIFIED MALE: Eleven.

UNIDENTIFIED MALE: What? How much is it down today?

UNIDENTIFIED MALE: 2 1/2.

UNIDENTIFIED MALE: It was down 3 the other day. I'm 20 -- I'm losing $40,000.

BUCKLEY: Losses are harder to take later in life. Just ask Jan Smith. She's watched her portfolio drop $40,000 in value since she retired this year. She was heavily invested in the stock of her former employer. Now, she's worried.

JAN SMITH, RETIREE: I just want to be able to live, and be able to know if I want to go to the grocery store I can buy what I want to eat. And I've worked and earned it. I feel that I've worked and earned it, and right now it doesn't look good.

BUCKLEY: Then there are people like Harold Grunfeld, a Park Avenue attorney and a one-time aggressive investor. In the past, he says, he would have sought out bargains in the stock market at a time like this, but because he's planning to retire in 10 years, he's sticking to a plan of diversified assets to better keep the gains he's already made.

HAROLD GRUNFELD, INVESTOR: As the years pass, and I now have Veralux lenses and a slightly larger bald spot, philosophically, you have to start thinking about things differently.

BUCKLEY: Grunfield's cousin is his financial consultant. He says the down days in the market haven't hurt his clients as badly as they could have, because they didn't put all of their eggs in one basket.

JOSEPH GRUNFELD, MERRILL LYNCH: Our hard year in the business wasn't this year. It was last year, when we were tapering people's expectation and not chasing after that greed.

BUCKLEY: Grunfeld and other experts suggest investors approaching or in retirement reduce risk to help survive the rainy days.

J. GRUNFELD: If you're well-diversified across numerous asset classes, you can weather these storms, and you must stick it out at this point.

BUCKLEY: As the bulls and the bears battle it out.

Frank Buckley, CNN, New York.

(END VIDEOTAPE)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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