Stock market losses take a personal toll on investors

NEW YORK -- Even Monday's monster rally on top of two weeks of steady gains can't dull the pain of a brutal fact: Behind the battered stock market's most gruesome statistic — $9.3 trillion in vanished wealth — are the life-altering stories of investors who have lost lots of money.

For the second time this decade, the U.S. stock market has suffered a historic 50% swoon, testing the staying power of even the most committed long-term investors. Shaken by a severe global recession and the worst financial crisis since the Great Depression, many investors are rethinking the way they manage their money and are ratcheting down risk.

The human faces behind the shrinking account balances are portraits in pain and dashed dreams, and offer an intimate glimpse into an uncertain financial future:

• Margaret Schaefer, 71, a retired teacher from Dearborn, Mich., recently took a part-time teaching job to avoid dipping into her retirement account, which has lost a third of its value.

• Robert Muse, 40, an aggressive investor from Reading, Pa., whose stocks have plunged nearly 70%, says he won't feel financially secure until he has $50,000 tucked away in government-insured certificates of deposit.

• Dan Cobb, a 61-year-old retiree, says he feels "too guilty" to buy a new motorcycle because his wife is still working and his cracked nest egg is down half-a-million bucks.

• Frank Baker, 59, a computer analyst who has seen his holdings dwindle to $500,000 from $1.2 million, worries that he may have to start looking for a job in two years when his current contract expires, rather than retire as planned.

• Grace Cooling, 42, a Houston-based engineer who still believes in stocks for the long run — despite losing "hundreds of thousands of dollars" in her 401(k) — sums up the angst felt by many Americans whose financial futures are riding on stocks: "My biggest fear is that my investments may not recover."

The Dow Jones industrial average vaulted 497 points Monday on the Treasury's plan to rid the U.S. financial system of toxic assets, and now is up more than 1,200 points in two weeks. But since its October 2007 peak, the most popular barometer of the U.S. market still is down nearly 6,400 points, a bruising that has prompted investors to reassess the widely accepted view that owning stocks is the best path to long-term wealth.