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US stock crash hurts Toowoomba investors

TOOWOOMBA investors were among millions of Australians nervously watching the stock market yesterday.

About $63 billion was wiped off the Australian share market after it opened yesterday morning, cutting another two per cent off the value of the average super fund.

The turmoil started after US politicians voted against a $US700 billion proposal to rescue US banks and stabilise the world's largest economy.

Treasurer Wayne Swan also warned that mortgage rates looked less likely to fall considering the current climate.

A Toowoomba finance expert said nine out of 10 people would have lost money on their superannuation yesterday in what was described by some commentators as one of the five worst days ever on the Australian market.

University of Southern Queensland finance lecturer Dr Peter Phillips said the hardest people hit would have been those living off their super and having to sell shares to get by.

“Small investors will certainly be panicking,” Dr Phillips said yesterday.

“Technically, if you haven't sold you haven't lost, but I don't know whether I'd take much comfort in that myself.

“Because if you calculate your nett worth and it's five per cent less than it was a few hours ago, that's certainly a loss.”

Dr Phillips advised those savvy investors wanting to take advantage of a struggling market to be wary.

“My general rule is that if you can't afford to lose the money then don't risk it,” he said.

“History has shown that purchasing stocks at these dark times can be a successful strategy, but you should be careful because sometimes there could still be darker times to come.”

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