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Published: Thursday, 10/11/2001

Area 401(k) holders stay course

BY HOMER BRICKEY
BLADE SENIOR BUSINESS WRITER

Most Toledo-area workers have received their third-quarter 401(k) statements. And, if they even dared to peek, they were shocked.

Third-quarter 2001 - scarred by the terrorist attacks on the World Trade Center and the Pentagon - was the worst three-month period on Wall Street since the crash of 1987.

The average stock mutual fund, out of more than 8,000, lost nearly 18 percent of its value in the quarter.

Yet if the lunch crowd at the Docks collection of restaurants at Toledo's International Park is any clue, most investors are holding fast to what they have, making few if any changes, and looking for better times to come.

And 401(k) plan administrators and financial planners say they see very few signs of investors chickening out of the stock market.

“I'm not even looking at my last statement,” said Chris Barror, 26, who was delivering food products for Multi-Flow Dispensers of Ohio. “I'm many years away from retirement, maybe 35 years away. The market went down, but it will bounce back.”

He figures his paper loss is “a little less than half” of his investment at the market peak. But, at this point, “I don't even want to know,” he added.

At the other end of the age spectrum is Thomas Fairhurst, a retired executive with Toledo's Dana Corp. “I think it's a good opportunity,” he said confidently. “I turned in some bonds that gave us some pretty good gains, and I invested in some [more] stocks.”

Mefty Lechman, who describes her age as “old enough,” said, “I've been through this before. I think even though the market is down, it will go back up.” Ms. Lechman, director of Children's Miracle Network at Mercy Children's Hospital, added, “That's why you have a 401(k). That's why we work so darn hard.”

Raquel Bravo was among those who haven't bothered to look at the latest dismal 401(k) results. “Right now, nothing is good,” said Ms. Bravo, an administrator for Toledo Public Schools and a former Toledo council member. “I just don't want to know. It's going to go back up. I'm in high-risk [investments], and I'm going to continue.”

The Dow Jones industrial average, which ended the quarter down 25 percent from its early 2000 peak, climbed about 188 points yesterday.

Most people The Blade spoke with yesterday said they didn't know exactly how much their paper losses were, but a few had a pretty good idea.

Paul Longenbarger, 35, a mechanic for Midas Muffler, guessed that his 401(k) account has dropped $1,000 to $1,500 in value in recent months, but he said he doesn't lose any sleep over it. “It's long term,” he explained.

Troy Marshall, 32, director of operations for Aldi Foods, said he normally keeps tabs on his account by telephone but doesn't have the latest results. “I know we didn't do well,” he remarked. He intends to stay in “the most aggressive investments, the ones I have.” With 30-plus years left to work, “it's not even an issue,” he said.

Helyn Bolanis, a fee-only financial planner, said only two of her 280 clients bailed totally out of the stock market. “During this period [after the Sept. 11 attacks] I have contacted our clients by letters twice and by phone calls three times,” said the founder and president of Parlan Financial Corp. in Toledo.

She pointed out that by the start of this week, the Russell 2000 index was up 11 percent from its bottom and the S&P 500 index had gained 13 percent.

“People are showing considerable patience,” said Mike Burns, senior consultant with Findley Davies, a Toledo benefits consulting firm that keeps records for about 170 401(k) plans in Ohio and North Carolina.

Mr. Burns, who spot-checked some of the plans yesterday, said few people close to retirement had switched their 401(k) plans to more conservative investments.

He attributed investors' relative calm to “education attempts by corporations that are sinking in. People actually understand how the market [recovered] from previous shocks.”



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