By Meg Richards
The Associated Press
This year's rally in stocks, which hit a milestone Thursday, hasn't been strong enough to make Kevin Flynn forget about the money he lost in the downturn.
"Let's just say that three years ago I had about three times more money in one account than I do now," said Flynn, 41, of Martinez, Calif.. "It took me 10 years to save all that money, and it's not even close to being back where it was.
"Things are going to have to get a lot better if I am going to be able to keep up with my friends in my retirement years."
Flynn, who works for a real-estate title company, has stuck with the market, though. He still invests 10 percent of his paycheck in his 401(k). He's encouraged by the gains he's seen this year, but he can't shake the nagging feeling that more losses might be lurking around the corner.
"I'm worried that everything I spent years working for could come crumbling down in one lousy year again," he said.
The Dow Jones Industrial Average, which is an average of 30 actively traded blue-chip stocks, had not broken the 10,000 barrier since May 24, 2002. It closed up 86.30, or 0.9 percent, at 10,008.16 Thursday and continued to gain Friday, but market watchers who have seen this milestone before - and watched it slip away - were skeptical about its significance.
"The Dow index is simply a nostalgic unit of measurement," said Ernest Csak, a New York Stock Exchange trader.
The first time the Dow passed the 10,000 mark - March 29, 1999, when it closed at 10,006.78 - the exchange had "a party atmosphere," Csak said. "Today ... it was business as usual."
Csak said he follows other indexes more closely - such as the Russell 2000, which measures the performance of small-cap companies, and the Standard & Poor's 500 index, a basket of 500 widely held stocks that provides a broad snapshot of the overall U.S. equity market.
Though traders downplayed the Dow's move beyond 10,000, it was likely to resonate with common investors, who have been looking for further evidence that the economy is improving.
"You can't minimize this cycle. I know it's just a number, and I know that most people don't even have any stocks in the Dow 30, but it's such a psychological lift for people, especially going into the holiday season," said Judi McDonald, who owns a financial consulting business in Hanson, Mass. "You know, perception is everything."
In June 2002, when the market saw several down weeks, 30-year-old Julie Keslik liquidated her portfolio of blue-chip stocks. She sold off holdings in AT&T, McDonald's, Home Depot, Wells Fargo, Microsoft and Cisco Systems - and figures she lost about $40,000.
But she's not sorry about cashing out ahead of this year's rally because she used the money to buy a $282,000 home in Minneapolis, which she says is now worth $450,000. Now Keslik is thinking about buying more stock, but she's in no rush.
"I want to see a little more traction in the market before getting back in; and when I do, I am going to be a lot more cautious than before."
Joe Smith, of Cresskill, N.J., never considered selling during the downturn; he's owned stocks since 1967, when he joined an investment club.
His portfolio was doing so well in late 2002, he decided to take early retirement and look after his investments full-time.
"I believe you should buy good companies at good prices, and if the market goes down and your company is still the same company it was when you bought it, then stick with it," Smith, 64, said. "Buy more."
In late February, Smith rolled over a pension plan and invested every penny in equities - 29 companies in all, including retailer Hibbett Sporting Goods Inc.; Home Depot and Lowes Cos. Inc.; banking firms Harleysville National Corp. and Greater Bay Bancorp; and generic drug maker Barr Laboratories Inc.
His portfolio is up more than 30 percent for the year, well outpacing the Dow, which has gained about 20 percent.
"And I'm an amateur," he said. "If I can do it, anyone can do it."
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