Taking It All in Stride

Bob Adams, 69, retired five years ago after a career in radio broadcasting and later, community college teaching. With most of his retirement savings tied up in the market, Friday’s 390-point drop got his attention.

“This one is a real knot in the stomach,” he said. “Anytime you have that kind of a drop, especially in light of the market this year, it’s worrisome, of course. I’m basically waiting. I told my wife the other day that we better select a brand of beans that we’re going to eat for a while.”

Still, Adams is philosophical. “I’ll put it this way: There are two things you have to have in order to invest in the market. You either have to have a lot of time or you have to have a lot of money. In both instances, an event such as what we’ve gone through this year isn’t going to bother you very much. Because if it’s the difference between having a million dollars or 3 million, so what? Or if you have lost half of your value but you’re young enough that you don’t have to use it right away, then again, it’s not a big deal if you can build some confidence that the market will respond at some point. And it always has.... This is a great country we live in.”

But with 85% of his retirement savings in the market, “I’m watching ... I pray a lot,” he said.

Still, investing on his own over the last 10 years (he used a broker for 10 years before that), Adams figures he has bettered the market every year for the last 11 years. “I look for growth companies. I look at the history of a company and gauge from its history what it’s likely to do in the next five years and make some decisions based on the historical values of the company.”

Adams avoided big losses on the Nasdaq by avoiding companies--the dot-coms, telecoms--he saw as overpriced.

“I’ve lost money over the course of a year, but if the market is down 10%, I’m down 5%,” he said.

“This is a learning experience. We’ve been through ‘87, when the market dropped so much in a single day, I can remember watching the experts on ‘Wall Street Week’ and they looked like deer in the headlights. They looked scared to death.... [I]t didn’t bother me that much. I knew the market would come back, and it did.

“We’re not going to go back to into ... 20%-plus growth rate again, I’m sure, but the market will return to its normal 12% growth.”

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Kim Murphy