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Those moves left investors a choice of taking more risk with their money in the stock market or settling for near-zero returns on money-market funds and bank savings accounts, and not much better on certificates of deposit. Those who have the stomach to stay in stocks may have reaped rewards, but they will never forget the ride. Jay Sachs of New York recalls thinking about putting his savings under a mattress when the Dow plunged 777 points on one day in September 2008. By the following March, with daily declines continuing, he was still "scared out of my mind." But Sachs, a retired computer consultant, soon tiptoed back into the market, buying dividend-paying blue chips and some mutual funds three years ago. Today his portfolio is well above where it was before the crisis began. But his optimism is muted because of what he endured in 2008. "The fact that there's still some fear out there is probably a good thing," he says. "Because when everyone is euphoric, you'd better start trimming your sails." Bookman of Brooklyn, a retired software executive, is an investing enthusiast who made more than 1,700 trades through his Scottrade account last year. He prides himself on keeping emotion out of his investing. That strategy was severely tested when he lost 70 percent of his holdings in eight months during the crisis. But he kept going, remembering the advice of Warren Buffett, the billionaire investor: Be fearful when others are greedy and greedy when others are fearful. "I just kept buying because I had waited for this time my whole life," he says. "I had heard about the Depression when anybody who had bought at the bottom made a fortune." Even investors who put their faith, and their money, in the market during its darkest days have muted expectations for stocks in the near future. Expecting a pullback in stocks, Bookman has sold 30 percent of his holdings in the last two months. "I just think that people right now are too complacent," he says. "I hear about all the problems with Europe and the economy, and a lot of people are out of work, so I don't think things are so good. The market is way up, but the world hasn't changed so much." Financial experts say the experience of surviving 2008 may embolden investors the next time there's a market shock. "When we have these downdrafts, they're a good reminder of volatility and a good opportunity to load up on stocks when they're cheap," says James Angel, associate professor of finance at Georgetown University's McDonough School of Business. Small investors like Doug Heuring, 40, of Cape Girardeau, Mo., vow to be ready for the next crisis. Heuring, a medical technologist, snatched up some biotechnology stocks "when the market was on sale." His portfolio is 30 percent or more above where it stood when the crisis hit. He knows he could have done even better had he been bolder. But at least he didn't flinch when the market tanked. "You've got to stay the course," he says. "A lot of people panic when their stocks hit lows, but if they're good companies, they will come back." That is not so easy for Cheryl Friedman, the St. Louis retiree. She sits in her office and watches market chatter on CNBC all day, waiting for the appropriate time to get back into the market. But the timing never seems right. Not when the crisis was fresh, and not now, when stocks are up more than 20 percent since early October. "It's very difficult to know what to do," says Friedman, 63. "I should have just sat back and waited. But when you're at this point in life and there's no way to replace your assets, you can't afford the risk."
[Associated
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