CHARLESTON, W.Va. -- The ongoing Wall Street crisis has washed away a fourth of the value from West Virginia's investment portfolio -- a $2.5 billion decline -- since the state's budget year began July 1.

The chief of the state's Investment Management Board told legislators Monday that the state's holdings have been severely battered along with the rest of the market amid the continuing turmoil.

"It's kind of a cold-hearted beast, and we felt that like everyone else,'' Executive Director Craig Slaughter told a joint meeting of major House and Senate committees. "There's nowhere to hide from that kind of a market.''

The state's investments are now on track to miss its earnings projection for the second straight year, Slaughter said. That leaves the Legislature to carve money from next year's general revenue budget to offset the losses.

The bulk of the invested funds comes from public employee pension programs, which bank on an annual return of at least 7.5 percent. It beat that target in the two prior budget years.

The board also invests a portion of the state's "rainy day'' fund, spelling a drop in that emergency reserve. It had equaled 14.7 percent of the state's $3.9 billion general revenue budget on July 1.

But Slaughter also said that the state could have done much worse, had it not invested in a wide array of stocks, bonds and other holdings.

"The only good news, perhaps, is that if we didn't have a diversified portfolio, it would be worse,'' he told those assembled in the House chamber.

As a result, Slaughter said the board plans to stick with its investment strategy, and to stay in the market at current levels.

Citing Wall Street's historical ability to rebound, and sometimes quickly, Slaughter predicted that West Virginia can stick with a 7.5 percent return as its long-term goal.

"We know the market is going to come up at some time,'' he said. "We don't want to panic and change our stripes just because of what happened yesterday.'' 

CHARLESTON, W.Va. -- The ongoing Wall Street crisis has washed away a fourth of the value from West Virginia's investment portfolio -- a $2.5 billion decline -- since the state's budget year began July 1.

The chief of the state's Investment Management Board told legislators Monday that the state's holdings have been severely battered along with the rest of the market amid the continuing turmoil.

"It's kind of a cold-hearted beast, and we felt that like everyone else,'' Executive Director Craig Slaughter told a joint meeting of major House and Senate committees. "There's nowhere to hide from that kind of a market.''

The state's investments are now on track to miss its earnings projection for the second straight year, Slaughter said. That leaves the Legislature to carve money from next year's general revenue budget to offset the losses.

The bulk of the invested funds comes from public employee pension programs, which bank on an annual return of at least 7.5 percent. It beat that target in the two prior budget years.

The board also invests a portion of the state's "rainy day'' fund, spelling a drop in that emergency reserve. It had equaled 14.7 percent of the state's $3.9 billion general revenue budget on July 1.

But Slaughter also said that the state could have done much worse, had it not invested in a wide array of stocks, bonds and other holdings.

"The only good news, perhaps, is that if we didn't have a diversified portfolio, it would be worse,'' he told those assembled in the House chamber.

As a result, Slaughter said the board plans to stick with its investment strategy, and to stay in the market at current levels.

Citing Wall Street's historical ability to rebound, and sometimes quickly, Slaughter predicted that West Virginia can stick with a 7.5 percent return as its long-term goal.

"We know the market is going to come up at some time,'' he said. "We don't want to panic and change our stripes just because of what happened yesterday.''