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Investors running scared
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July 18, 1996: 3:02 p.m. ET
Rocky market convinces many to sell out of funds to ease jitters
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NEW YORK (CNNfn) - If Wall Street ever had a "Maalox Moment," it certainly came this week as a volatile stock market gave many small investors the jitters.
Tumultuous rises and falls convinced many that the time had arrived to seek out safe havens -- investments that would lead to solid returns instead of ulcers.
One industry tracker reported that investors withdrew an estimated $500 million from mutual funds in just two days of market turmoil this week -- the highest rate cash has moved out of mutuals since November 1994.
Clearly, some investors would prefer to sit on the sidelines until the market settles down.
But while getting out now means low risk, it also can mean low returns.
"The safest of all possible havens would be a money market account," said Jon Teall, a spokesman for Lipper Analytical Services. "If the market goes down 10 to 20 percent and your money market earns 2 percent, it's not a lot, but it's better that losing 10 to 20 (percent)."
While money market funds are essentially risk-free, some analysts say it's possible to stay in the stock market -- with its stronger returns -- while still minimizing risks.
"The defensive area I think investors can go into during times of volatility are utility stocks, (as well as) growth stocks such as drugs, food and tobacco," said Tony Dwyer, market strategist at Rickel & Associates. "Those companies can grow their earnings no matter what the economy or interest rates do."
But Dwyer adds the wisest thing for an investor to do is keep emotion out of long-term planning.
Analysts explain that if you're investing for the next 20 years, it doesn't matter whether you bought shares three weeks ago or yesterday -- stocks historically beat other kinds of investments over long periods of time. 
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