BOSTON - A FINANCIAL crisis being described as the worst since the Great Depression has left investors thinking far beyond the realm of whether it's time to buy or sell.

No matter how close they are to retirement, many are considering getting out of the stock market entirely by shifting to cash or even gold, believing the market is so shaky they're willing to take the potential tax and inflation erosion they'll suffer from a quick pullout.

Others are staying in, even after this year's 14 per cent decline to date in the Dow Jones industrial average has eaten away at what they had thought were safe portfolios.

'Right now, it is just a loss on paper. If I pull out now, it becomes an actual loss,' says Ms Deborah Allen, a 51-year-old administrative assistant who's trying to protect a nest egg she's relying on to take early retirement next year.

Ms Allen has about US$50,000 (S$71,000) in a retirement account that she plans to use in early retirement until she can draw pension benefits at age 55. But despite a conservative investment mix, the account has shrunk this year in a falling market.

'The money that I thought was going to be there isn't there, so I'm going to have to really look closely over how I'm handling my money for at least the next year,' she said.

Many others are cutting back on expenses or considering delaying retirement - the primary aspects of their economic lives where they feel they have control - and leaving investment portfolios untouched as they emotionally prepare for the worst.

'I'm not ready to jump out of a window,' said Mr Bob Shanahan, a 49-year-old estate planning attorney.

'If I have to sell apples on the street corner, I have no problem with that. I can live modestly; a lot of people can't.'

Mr Shanahan has a portfolio of about US$500,000 held in individual retirement accounts - down US$40,000 over the past few months.

He could switch to more conservative investments, but if he withdraws now and converts to cash, he'd pay early withdrawal penalties and earn income this year that could push him into a higher tax bracket.

Without the historical returns that stocks typically generate, he fears he could run out of cash in retirement.

Several financial planners worked the weekend to hold clients' hands, hearing a broad spectrum of fear and uncertainty.

Some customers called to say they were inclined to shift holdings to bank savings accounts, or anywhere but the stock market.

'I had one couple who already had a relatively low-risk portfolio, but they said, We just don't want to hold any stocks,' said Mr Rick Miller, founder of Cambridge, Massachusetts-based Sensible Financial Planning.

Mr Miller said the week's volatility offers an opportunity for investors to consider risk, 'and learn whether they still think their financial plan can tolerate it, and whether they can emotionally tolerate it.'

While Mr Miller and other planners cautioned against letting the market events of a few weeks or months influence long-term retirement planning, they also acknowledged that the government's unprecedented rescues have undercut normal assumptions about how to assess risk and make investment decisions.

'For most who beat the market, it's going to be a matter of sheer luck, rather than skill,' Mr Miller said.

'And if we're trying to predict both what the market will do and what the policymakers will do, it's even harder.'

As an example, Mr Miller pointed to the folly of investors who sold at midweek. The market suffered a massive loss on Monday as investors woke up to two storied financial firms gone in a buyout and a bankruptcy.

There was a rebound on Tuesday, another plunge on Wednesday and rallies on Thursday and Friday after the government intervened.

'If you had sold on Wednesday, you would have missed out on a 7 or 8 per cent recovery,' Mr Miller said.

Such gyrations fed fears last week that triggered a Depression-style run of massive withdrawals by institutional investors in typically safe money-market mutual funds after a handful of funds' underlying assets fell below US$1 for each investor dollar.

Meanwhile, gold prices rose US$70 an ounce on Wednesday - the largest one-day jump in history - and online brokerage Scottrade saw its highest-volume trading day ever on Thursday as investors rushed to move money in their portfolios.

Such moves often result from people's natural bias to take action in response to turmoil, and satisfy a need to do something, even if staying put makes the most sense, said Mr Stuart Ritter, a certified financial planner with T. Rowe Price.

Even if this market meltdown is fundamentally different than others, many advisers are turning to the time-tested mantra of riding out the storm, and counting that history will repeat itself and stocks will eventually rebound.

That's been the case with every market tremor from the Great Depression the dot-com bubble, Mr Ritter said.

'The tendency is for people to say this is different, and we will never recover,' Mr Ritter said.

'But each time, historically, the market has been resilient. I don't know if this is a different one.'

At age 90, Mr Steve Blauvelt lived through the Great Depression, and he's betting this time around that markets will eventually rebound.

The retired chemical engineer has recently shifted investments in his US$1 million portfolio to oil, coal and uranium stocks, and he enjoyed a gain of 3 per cent last week as the Dow Jones industrial average finished down about 0.3 per cent, 33.55 points.

Early in the week, Mr Blauvelt even invested a couple thousand dollars in an exchange-traded fund that tracks the solar energycbusiness.

'It was a buying opportunity,' Mr Blauvelt said. 'I don't think we're out of the woods yet, no matter what the government does with its bailouts.'

'My attitude is this thing is going to be here a little while longer, and I will see a lot of ups and downs, but I have a firm conviction in the stocks I'm holding, and I'll stick with it.' -- AP