Article July 29, 2002 Issue

SURVIVING a stock market crash

By Beverly Goldsmith Contributing Editor

In September 1987, Australia experienced a disastrous stock exchange crash, in the wake of the one in the United States. Analysts had predicted problems on the economic front, but people who owned shares or who had invested in equity trusts, insurance bonds, or superannuation pools were still caught off guard. Large amounts of money were lost. Many ordinary people were affected by the financial fallout. Brisbane couple Meg and Barrie McCauley were two of them.

The year had begum well for the McCauleys. They were engaged and looking forward to buying their own home. This would be several years away, they knew. Meg was going first to America to train as a Christian Science nurse. So they put on hold the "great Australian dream" of being homeowners. However, Barrie had a sizable sum of money for a down payment, so he decided to invest it in shares on the stock exchange. He anticipated that it would earn additional income while Meg was away.

By April, Meg had sold her own home, paid off debts, and banked the small amount remaining from the sale. She said goodbye to Barrie and left for the United States. It was going to be a long three years there.