their friends, neighbors, and themselves losing positions. After 1987, we didn’t lose a lot of people down on Wall Street, but [from] 1989 — 1990, it became a little bit like a ghost town. It’s happening again.
B.E.: Do you believe we’ll see a market bottom this year?
GRAIN: I think it’s going to be a little more painful [because] 2003 is not going to be a wonderful year. [The market] may improve a little but it’s going to be slow and painful.
GREER: Clark is right. I think we’ll see a slight improvement but even if there is a drastic improvement, we are going to go through some more pain.
B.E.: So what should investors do now?
GREER: Unfortunately, Americans are into instant gratification and [they] don’t want to see that a bond price is better than [their] stock returns. You see what happened in the 1980s when we had those interest rates [as high as] 14%. Everybody was ready to forget about equities and put everything into the bond market. The reality is that all of us should have a percentage of our portfolios in bonds. That’s part of the diversification. If you’re sitting on the side, you’re going to mi
ss your opportunity.
JOHNSON: Your time horizon is so critical. We talk about five or 10 years. We talk about people saving for retirement in 20 years or [so]. If we can segregate parts of our portfolio then we [can identify] what we need in 10 years, 20 years, [or] what we can pass on to the next generation.
I recently found out that my great-great grandfather owned stock. [My family] had shares of American Home Products [now called Wyeth (NYSE: WYE)] that they sold in 1937. If [those dividends] had been reinvested, our family would have easily had a million dollars that we could use to put all the kids through college [or] give everybody a nest egg when they start out. Think about [investing] for your grandchildren’s retirement instead of buying all the Tinkertoys. With that time horizon, it makes it more comfortable to live through the day-to-day turmoil in the market right now.
PLUMP: Get started and stay focused. Get your people together and hammer it in that you’re not just doing it for them but for their children. Three years ago I didn’t even think about investing. But now, I’m thinking about my children investing. My daughter just [turned] 15. She wants to start her own investment club–at 15. If I had started my own [club] at 15, I could probably have a nice nest egg for my children. So, it’s making me think bigger. I’m not intimidated.