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Hard not to freak out right now

September 29th, 2008 at 09:02 pm

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?

8 Responses to “Hard not to freak out right now”

  1. gamecock43 Says:

    me too. I am at a loss. I am just trying to monitor my lifestyle and spending to handle this market. I am trying to wean myself off the luxuries I am sure I will not be able to afford in the next year or so. 'sigh.' It was nice to be rich- but I was enjoying luxuries that tended to be reserved for the upper class. Time to get back to a lower class lifestyle where I belong.

  2. Single Guy Says:

    I don't know what to make of this any more, though living frugally is helping. I will say one thing though. Now is the time to consider taking old 401k money and moving it into a Roth IRA if that is a possibility for you (and you have been considering it). I have just contacted some people, and hope to set up some type of conversion in the coming weeks. At least my tax hit will be lower now than if I did it this time last year (that's the glass half full talking).

  3. AmbitiousSaver Says:

    We moved our accounts to government backed funds for our retirement. DH is getting a $4K bonus and I'm not sure whether to pay down our debt or stash it in a CD or something. But we've hired a financial planner to help with that.

  4. gruntina Says:

    I am at loss what I should do to my 401k account. I feel like I should be changing it to a more conservative package instead of semi-agressive

  5. Broken Arrow Says:

    First, please take a deep breath. Today's drop is huge. No doubt about it. Now, let's take a look at why it happened. We can't have a solution until we understand the problem, right? Today's drop was due to two things:

    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!

  6. baselle Says:

    I think if you have mutual funds you probably shouldn't move them, or if you can't sleep at night, move 1/2 of them into something that you think is safer.

    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.

  7. thriftorama Says:

    We're not selling any stock. I actually bought 200 shares this afternoon. We are just wondering if we should be trying to cut back more and save more money so we can have more cash on hand.

  8. Broken Arrow Says:

    HEHEHE, I love it! I'm glad someone has both the kahones and the foresight to see this as an opportunity. I went all-in yesterday. One way or another, this too will pass, but not every day will you get a chance like this to buy pretty much whatever you want at a market-wide discount. We just have to have the courage to wade into it.

    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.

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