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CNN Sunday Morning
Market Decline Hits Retirees Hard
Aired July 14, 2002 - 11:21 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: After another disastrous week on Wall Street, many investors are hoping for better days ahead. The market's sharp decline over the past two years has hit especially hard on people at or near retirement age. CNN's Jeff Flock spent the day near Chicago with an investment club for retired men to see how they're coping.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Joel Fisher?
JOEL FISHER: Here.
JEFF FLOCK, CNN CHICAGO BUREAU CORRESPONDENT (voice-over): Roll call, the Quibble and Nibble Investment Club at the North Shore Senior Center outside Chicago. Most of the members are here...
UNIDENTIFIED MALE: Here.
FLOCK: ... but a lot of their money isn't anymore.
UNIDENTIFIED MALE: It went down two percent in the month of May.
FLOCK: Listen to the monthly report on their shrinking portfolio.
UNIDENTIFIED MALE: And seven percent in the last week-and-a- half.
FLOCK: But unlike people with years of work ahead and plenty of time to recoup, everyone in this room is retired.
(on camera): You don't have as much time to maybe get it back.
UNIDENTIFIED MALE: That's right.
FLOCK: How do you feel about that?
UNIDENTIFIED MALE: You cannot earn back the losses that you have.
FLOCK (voice-over): Wayne Shonmaker's (ph) got his retirement savings out of stocks before the market tanked. Bill Ray (ph), age 71, got it out only two months ago. UNIDENTIFIED MALE: Fortunately, that was a very god time, although, you know, six months earlier would have been better.
FLOCK (on camera): Right.
UNIDENTIFIED MALE: But the last two months have really been hard.
UNIDENTIFIED MALE: Worst performers have been Tyco -- took a nose-dive.
FLOCK: The question now, what's the investment group to do. Their portfolio now worth just short of $300,000 is half what it once was.
UNIDENTIFIED MALE: It's hard to find a good one.
FLOCK: Home Depot has been a good performer but there is a motion to sell half the group's 600 shares.
UNIDENTIFIED MALE: Is there a specific reason that we're -- that we've identified that we should sell Home Depot?
FLOCK: Partly to take out profits, partly to consider shifting many some of their money into competitor, Lowe's.
UNIDENTIFIED MALE: It's holding up much, much better than Home Depot. So I don't see why you couldn't diversify any...
FLOCK: They put it to a vote.
UNIDENTIFIED MALE: Five, six, seven, eight. It carries.
FLOCK: But when it comes to buying, there isn't much appetite.
UNIDENTIFIED MALE: I don't think that makes any sense at all.
FLOCK: There is a motion to buy Johnson & Johnson, a 100 shares.
UNIDENTIFIED MALE: I think we should buy it.
FLOCK: But the club already owns Merck and Pfizer and they haven't done well.
UNIDENTIFIED MALE: I think Johnson & Johnson is a fine company, but maybe the timing is poor.
UNIDENTIFIED MALE: The medical end of this thing has taken it on the chin. It is down in the dumps. And if you're ever going to buy in a field, I think now is the time to buy.
UNIDENTIFIED MALE: To buy 100 shares of Johnson & Johnson?
FLOCK: But when it comes to a vote...
UNIDENTIFIED MALE: Four, five, six. Did not carry. FLOCK: Whether it's 100 shares or a thousand, everyone knows the strategy is to buy low and sell high. But these days, no one knows what low really is.
I'm Jeff Flock, CNN, Northfield, Illinois.
(END VIDEOTAPE)
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