I am usually Ok when t he stock market tanks, because I view it as an opportunity to buy stocks for cheap. But today, on top of everything else? even the hubby and I were asking, "Well, should we do something?" Start hoarding more cash? Buy more stocks, What? For once, we had absolutely no answer. What are you planning to do?
Hard not to freak out right now
September 29th, 2008 at 09:02 pm
September 29th, 2008 at 09:07 pm 1222722474
September 29th, 2008 at 09:23 pm 1222723388
September 29th, 2008 at 09:34 pm 1222724095
September 29th, 2008 at 11:33 pm 1222731186
September 29th, 2008 at 11:54 pm 1222732469
1. Wachovia went belly up today.
2. Bailout did not get voted through.
#2 is especially important because if you look at today's Dow charts, you'll see that the massive drop coincided with the bailout vote that ultimately failed at around 2pm or so.
Anyways, that's why it dropped.
Now, let's think this through some more, OK? What does that mean? Well, for better or worse, America has been going through life so far without a bailout up to this point, and we're all still here right? So the bailout was rejected today. It's not the end of the world.
Please remember that intra-day fluctuations are a reflection of market sentiment, not always actual economic health. The economy isn't going to collapse. Mr. Market is just in a very bad mood today because he didn't get the bailout money he wanted.
So, what should we do about it? Believe it or not, but my mom asked me the same thing today, because she banks with Wachovia. My answer? I said, "Absolutely nothing." Banking is going to be fine.
Your retirement portfolio. While it is going to take a hit, please remember that we shouldn't touch the allocations on that because Mr. Market might all of a sudden feel much better if or when the bailout money does arrive or that the bank failures start to subside, and we might miss out on those rises.
The only people who should be worried are employees who work for these collapsed banks, because their jobs may or may not be in danger. By now, they should have a back-up plan, if they don't already have one.
The only other people who should take notice today are active traders. If you're a trader, this is the perfect kind of day to buy back in, and I did exactly that.
Otherwise? Honestly, please go forward and have a nice day!
September 30th, 2008 at 03:23 am 1222745019
If you have individual stocks, take a hard look at them. I'm taking a hard look at my financial ... is it going to be taken over by another bank? I might still ride it out, but I'm going to think about it, so that if I make the "wrong" decision I'll have made an active decision rather than a passive one. Remember that not doing anything is a decision also.
Time to really bulk up the cash and cash equivalents.
September 30th, 2008 at 04:10 am 1222747837
September 30th, 2008 at 12:24 pm 1222777446
My stock buy actually tanked by roughly 15% yesterday! And yet, the loss has already been recovered in pre-trade today! So, no paper loss! Crazy eh? Heck, I might even get away with a nice little profit!
But risk tolerance aside, I suppose I feel the need to say yet again that these are unusual times, and there is no guarantees. But you know all this already. Please be careful anyways.