ad info

 
CNN.comTranscripts
 
Editions | myCNN | Video | Audio | Headline News Brief | Feedback  

 

  Search
 
 

 

TOP STORIES

Bush signs order opening 'faith-based' charity office for business

Rescues continue 4 days after devastating India earthquake

DaimlerChrysler employees join rapidly swelling ranks of laid-off U.S. workers

Disney's GO.com is a goner

(MORE)

MARKETS
4:30pm ET, 4/16
144.70
8257.60
3.71
1394.72
10.90
879.91
 


WORLD

U.S.

POLITICS

LAW

TECHNOLOGY

ENTERTAINMENT

 
TRAVEL

ARTS & STYLE



(MORE HEADLINES)
 
CNN Websites
Networks image


CNN Today

How Should the Personal Investor Deal with the Current State of the Markets?

Aired February 23, 2001 - 4:09 p.m. ET

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

STEPHEN FRAZIER, CNN ANCHOR: It would not be editorializing to say that another dismal week for the markets has finally come to an end, a week that signaled that the decline in stock prices probably isn't over yet.

In a moment, we are going to try to get a handle on where the markets are headed with Gerri Willis of "Smart Money" magazine. First, though, let's take a quick look at where we are today, beginning with the Nasdaq.

It actually fought its way back into positive territory today, although I'm looking now at the entire year. Let's go back, close this out and see if we can just see what happened today: a pretty steady decline, which ultimately ended up -- this is the week now. And it does not reflect the fact that today actually got a little bit better at the very, very end of the week. And we'll talk to Gerri Lewis about why that might have been.

But here you see what has been happening for the past 12 months and how difficult it has been for investors who have invested in the kind of technology stocks which are very heavily represented on -- on that, although I'm showing you now the Dow Jones industrials.

So let's turn to Gerri Willis and see what we can find out about this.

Let's first talk, Gerri, about the tech stocks, because there you are in San Francisco, which is really tech shocked now, not just tech heavy. What's been happening with them?

GERRI WILLIS, "SMART MONEY": Well, it's been a terrible couple of months. Remember that back in January, we expected the Nasdaq to come back and come back strongly after end-of-the-year selling -- did well in January, fell apart afterwards. The Nasdaq is down now 56 percent from its high of last year.

FRAZIER: What does that mean, then, for people who have invested heavily in those stocks: Is it time to bail, finally?

WILLIS: Well, it depends on how you are holding those stocks. If you are holding those stocks in your 401(k) and you're 20 years from retirement, it's not something you have to be concerned about today. But if you succumbed to the temptation last year to buy tech stocks for short-term purposes -- say, buying a house that you plan to do in two or three years -- this isn't where you want your money to be.

FRAZIER: Where, then, would you recommend it go?

WILLIS: Well, you want to take your money to the sidelines or in slower growth, less volatile instruments like bonds, maybe a minimarket -- minibond fund. And if you just want to put your money aside for awhile while you decide what to do with it, you might just put it in a money market account.

FRAZIER: Well, you're giving us a lot of personal investment help here right now. But let's talk about the larger economy as a whole. The fact that this is happening, does that mean that the wealth effect that people are feeling has finally evaporated, that people aren't buying things, don't feel that sort of consumer confidence that we saw earlier?

WILLIS: Well, you bet. The consumer confidence numbers have been the lowest that they've been in several years. And, yes, the wealth effect is definitely diminishing. You can see it in new home sales. You see it at retail stores across the economy. And that's key for the broader economy because consumer spending represents three-quarters of GDP. So without the consumers, you don't have a broader economic rally.

FRAZIER: In the past, now, when we've seen this kind of week, it's been a buying opportunity. A lot of people have said: Actually, this works out pretty well for me. And that seemed to mean more confidence on the part of consumers at large. Are we there now?

WILLIS: I think you are going to see people taking a wait-and- see attitude. There have been several short snapback rallies that only fell apart later. I think people are going to sit back and wait to see what happens.

FRAZIER: Well, thanks for guidance on what to do in the short run.

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

 Search   


Back to the top