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Petty Officer 1st Class Raymond Hughes wants to get back into the stock market — but not yet.

Few servicemembers would blame Hughes for his skittishness after the market’s latest lows.

The Dow Jones Industrial Average dropped below 7,000 for the first time since 1997 Monday after investors reacted to worse-than-expected news on industrial and construction output.

Insurance firm American Industrial Group’s posted $61.7 billion quarterly loss announced Monday further signaled to investors that more bailouts may be necessary for some of the country’s largest financial companies.

"Banks are making bad choices, and while I’m definitely interested in investing again, I’m hesitant to do so at the present time," said Hughes, of Submarine Group Seven at Yokosuka Naval Base.

"I want to wait until the market is at rock bottom before getting back in."

Although "rock-bottom" is notoriously hard to time, most economic experts don’t foresee a dramatic reversal of current misfortunes in 2009.

However, that doesn’t mean that servicemembers and others shouldn’t be contributing to their retirement funds, says Jim McDaniel, an accredited financial counselor working at Yokota Air Base’s Airman and Family Readiness Center.

People planning on retiring in 10 or more years should seriously consider investing in the stock market now, McDaniel said.

McDaniel points to Dow’s record of rebounding over the long haul, according to charts since its inception in 1896.

Even during large recent corrections, such as when the Dow dropped to 7,286 on Oct. 9, 2002, it rebounded to the 10,000 range by the end of 2003.

"What’s driving the market right now is that people are panicking," McDaniel said. "And when they panic, there is a tendency to sell at the wrong time."

Servicemembers looking for an ultraconservative investment can put their earnings in the Thrift Savings Plan’s G Fund, a special-issue government Treasury fund that earns about 3.6 percent interest per year.

Those looking to cash in their retirement funds in the next few years should put their cash in low-risk investments like Treasury bills and certificates of deposit, McDaniel said.

However, even low-risk funds come at a cost, he said, especially for long-term investors.

A low-risk investment may just barely keep up with inflation, meaning little or no real gain as the costs of goods and services rise.

There is also an "opportunity cost" that goes with an overly conservative approach. It will take far longer to earn the type of gains historically found on average in the stock market, McDaniel said.

Servicemembers on Tuesday said they believed the market would eventually right itself.

Petty Officer 1st Class Gerald Casares of the Center for Naval Aviation Technical Training Center in Atsugi said he hoped to buy more shares soon but wonders how much lower the market will fall.

"I’m taking a beating right now, but the market is cyclical, so I’m expecting it to go back up eventually," Casares said.

Brian Phillips, an Air Force retiree and a teacher at Yokota West Elementary, said he has little choice but to ride out the market turmoil. "If I was going to take my money out, I would have done it a long time ago," he said.

Stars and Stripes reporters David J. Carter and Bryce Dubee contributed to this story.

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