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Seattle Investor Group Calm as Markets Swing

RENEE MONTAGNE, host:

What else to call it but a wild ride this week on global markets. Fears of recession sent markets dropping as much as 11 percent; then the big rate cut by the Federal Reserve sent other markets rising just as sharply. Today, Asian markets ended trading mostly higher. Japan's lead index is up 2 percent. The bounce follows yesterday's rise in the Dow, which ended 300 points higher. If you're feeling dizzy, well, join the crowd.

From Seattle, NPR's Wendy Kaufman reports on how some investors are handling the turbulence.

WENDY KAUFMAN: Members of WEAL, Women Earning and Learning, are seated around the table poring over their year-end returns. The small investment club had a very good year in 2007, beating the market and posting a sizeable profit. Still, the overall market is down from its high-water mark in October. The Dow, for example, is off above 14 percent.

Nonetheless, Lisa Robertson(ph) and others in the club are confident that they have picked solid companies to invest in, and they're not about to panic now.

Ms. LISA ROBERTSON (WEAL Member): Am I nervous? I don't like it, but it just looks like there's some buying opportunities...

Unidentified Woman: Exactly.

Ms. ROBERTSON: ...coming in now. So no, I'm not pessimistic. I just want to get it over with quickly.

KAUFMAN: Graphic artist Beth Bronson(ph) takes a similar view, though she admits watching the market fall more than 450 points first thing Tuesday morning was a bit unsettling.

Ms. BETH BRONSON (Graphic Artist): And I went, whoa, are we in for a rollercoaster here. But it did start to come back, and I'm not nervous. And I agree with Lisa. I think it's a good opportunity to buy. In fact, we have a little pile here of things that we're going to be looking at our meeting on next Monday.

KAUFMAN: And since one of the companies they own stock in is being bought out for a sizeable amount of cash, Bronson says they'll have some new money to work with.

Ms. BRONSON: I think there are some stocks out there that are reacting to the market and that are still good companies to invest in, but the prices are dropping because everything is dropping. And you know, that's what we do in our club, is we look for good buying opportunities.

KAUFMAN: Their club, which takes a long-term view of the market, is assisted by betterinvesting.org, the nation's largest non-profit organization dedicated to investment education. Its investment philosophy looks at company fundamentals and price to earnings ratios. The women have no illusions about the challenges facing the economy, and they don't expect the Dow to be back at 14,000 anytime soon.

Here's Beth Bronson's prediction for the coming year.

Ms. BRONSON: The market will not be at 14,000, but neither will it be at 6,000. I would bet it's roughly where it is now.

Ms. ROBERTSON: I would say maybe up 5 percent from where it is now.

KAUFMAN: That's retired accounting manager Lisa Robertson.

Ms. ROBERTSON: I think it will go down a bit and then it'll come back in the second half of the year. You know, it won't be upstanding. But it'll - it's going to recover from where it is now.

Mr. GARY BALL(ph) (Investor): If you go back to even 1926, there's been 14 major downturns, and after every single one of them, the market comes back.

KAUFMAN: Gary Ball is another middle-aged Seattle area investor. As part of the Better Investing program, he teaches classes to neophytes.

Mr. BALL: And I usually ask people, what do you think is going to happen this time? And then just hearing that, they're most likely going to say, well, geez, I guess it'll come back.

KAUFMAN: Ball, a retired engineer, is also in the market for the long-term and he too believes there are and will be lots of good buys in the stock market, so long as you do your homework. He offers one other bit of advice. Don't check your portfolio on a daily basis. That way, when the market is on a downward spiral, you can sleep better at night.

Wendy Kaufman, NPR News, Seattle.

MONTAGNE: And now that the Federal Reserve has cut rates, is it time to refinance your mortgage? You can get the answer to that question - one that's been asked over the last few years - and learn about how market developments are affecting consumers by going to npr.org. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Wendy Kaufman