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Fidelity sticks with stocks
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October 22, 2001: 9:27 a.m. ET
After Sept. 11 tragedy, Fidelity management decides to stay in stocks.
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NEW YORK (CNNmoney) - In Boston, managers at Fidelity were moving fast. Within minutes of the second explosion at the World Trade Center, Fidelity's headquarters were evacuated. Most employees went home, but the senior investment team was dispatched to a secure backup site in a secret location not far from downtown Boston.
The top trading staff was sent to a second secret facility equipped with the phones and computers necessary to handle Fidelity's massive trading in stocks and bonds.
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Should Fidelity's funds move billions out of stocks and into cash? No way, decided the investment staff.
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"A lot of people were grieving quietly here," says Richard Spillane, who oversees the U.S. stock funds at Fidelity, "but the wheels of motion never stopped turning."
Over the next few days, says chief operating officer Robert Reynolds, Fidelity painstakingly accounted for all of its 800 New York City employees. The company's security team even visited staffers' homes to make sure no one was missing.
Back in Boston, Fidelity's headquarters were declared secure on the morning of Sept. 12, and the investment staff returned. By midday, researchers in Fidelity's chart room distributed a study showing how markets had reacted to nearly a dozen past disasters, including Pearl Harbor and the assassination of John F. Kennedy.
Over lunch, Spillane split analysts and fund managers into "satellite groups," each with up to 10 experts in a single industry like airlines or insurance. These sessions brought together both current and former specialists. The team that discussed airline stocks, for example, included Large Cap Stock Fund manager Karen Firestone, who had followed the sector in the 1980s.
"In some of these groups we had 25 to 30 years of experience," says Spillane, "so the older hands could say, 'Here's what to look for.' They could tell the younger people which insurance companies, for example, have the best track record for predicting losses on the first go-round. Overall, our message was just to keep your head up and keep going forward. If you get mesmerized by the headlines of today, you won't make it through."
Should Fidelity's funds move billions out of stocks and into cash? No way, decided the investment staff. "When markets go up," says Spillane, "they go up in short-term bursts. It's too easy to miss those moments, and it's just too expensive not to be there." 
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