I have been in cash with my 401k since roughly Dow 13,500 and am not in a hurry to get back into stocks. I certainly would not make a move before election day. If one party or the other seems to gain too much power the markets might be down November 5th big time.
after the election I am close to scaling back into the market, perhaps with 25% of my balance every month for 4 months. Stock prices may still have some downside, but they are definitely not going to run away from me.
Not necessary to pull out from your portfolio if you have bought some good company shares! My portfolio have dropped to 70% ! I’m sad but not worried ! When I leave my this money in bank , my interest are “peanuts” ! I leave my portfolio as it is and receive about 200% (infect much more from some bluechip companies) “interest” (dividend) than the bank gives me ! Be patient , after 2 to 3 years most of the bluechips will back to normal !
I went thru’ this before. When it go down …it have to go up ! What you need is PATIENT !
I just maxed out mine and my wife’s Roth accounts to take advantage of the low stock prices. I decided to do it now and stop my monthly deposits until Jan. My 401K maxed out the first of October but I plan to increase it in Jan. also as thing will not be too much better by then but in 6-7 years (my retirement timeline) will. Hopefully, the climb out of the whole will be quicker than the fall in and the more stock I can buy now will help with that.
I have not changed my 401(k) at all. It is still 100% mutual funds (25% S&P 500 Index Fund / 50% Wilshire 4500 Index Fund / 25% MSCI EAFE). I have 30-40 years more to work before retirement and I am excited to buy some undervalued securities. If we fall into a secular bear market, it is the probably the best thing that could happen to my retirement.
Outside of my 401(k) I am more cautious because I might not want to leave my money tied up for the next 30-40 years. However, I did recently buy AAPL at $97 and GOOG at $349 because I believed that they represented good values. Also, I am eying HPQ, TM, HMC, and SBUX.
I have been investing since the early 80’s and well remember when the Dow was in the 7000 range. Things were nicer then. Distant talk about the Dow heading for 10000. Now that the excitment is gone and people are wondering why, it makes me think that maybe just maybe 7000 plus was the real charm level for the Dow. When you see 10000 again it will be time to run for the hills.
nope, moved my 401k out of harms way back at the end of last year. I’m not fixing to put it back in.
Buying at a low looks good until your flushed out by bankruptcy and your investment goes up in smoke. A lot of companies are going to be reorganized before this is over
I would personally suggest that people take the same stance with stocks, that they would with gambling, because all in all, that’s all the Stock Market is. If you can afford to waste money, and lose big, for a chance to win big in the future, say like Warren Buffett, then by all means, leave your money in there. If on the other hand, your a normal Joe, run like hell, and if you really need to waste your money, go to the local convenience store and buy some lottery tickets. You’ll waste much less than in the stock market, and have just about as good of a chance of pulling a 10 to 1 return as you do in the stock market.
That’s is sad, but Carl has an obligation to pay back the loan. He received his degree now it’s his turn to pay it back. So instead of paying 450 a month pay 100 so what, what are they going to do if you are paying something. This is the American way though. Buy, buy ,buy, and when it’s time to pay it back we get mad. This is why we Need a UNIVERISAL HEALTHCARE SYSTEM. So when things go bad like with medical bills, we don’t have to lose everything. I do feel sorry, but I also think he needs to pay back the loan that got him his degree. This why I stopped going ,because I know those loans come due at some point. The only way I can afford to go to school is if someone else pays for it. And no one is, so I’m not.
I have made a one-time adjustment in my 401K to move a portion into high grade short term instruments – other than that I am aboard for the ride – wherever it goes.
I find it to be fruitless and pointless to “guess” where the bottom is – all that I know is 1) capitalism as an economic base is NOT dead and 2) the market is nearing 8 year lows and the PE is running about 9 vs. an average of 15 or so. That combines to reinforce my view that the preponderance of views which encourage investors to be on the next train makes sense to me.
I already feel better having typed this!
Interesting to see that my comment has been deleted!
So I ask again why are you afraid of talking to some real BEARS? Do you actually think that your articles can sway Mr. Market? Pretty funny.
No, I’m not pulling money out of the stock market. I did most of that over two years ago except for some precious metals and energy funds that I pulled last spring. Then bought back in, but too early this fall.
I pulled 90 percent of my 401K two and a half years ago and put it into CD’s. The remainder of my investments stayed in stocks, bonds, and mutual funds. So far I am loosing my shirt in the market. My dividend paying REITS have all but one stopped paying dividends and I have bought more shares of the ones that have lost the most value trying to cost average the things. The latest trick two of them have pulled in what they call a 10 for 1 reverse split which from where I am setting is costing me dearly. When my stocks that were 570 shares goes back to 57 shares and you add the total new price of the 57 shares I am loosing my A** on them. Since I don’t have my life savings in stocks I will try to ride this mess out but from where I am setting some of my $20.00 stocks are now penny stocks. I keep thinking the real estate market will recover and so I am buying more shares of the REITS I already own hoping to make some money back when the dust settles and they can see there way clear to start paying a dividend again.
This was a manipulated market today pure and simple. -500+ pre and -500+ post and a “simple” 300 point loss, get real. What was this market bouncing to, good future earnings and a good 4th quarter? Where will earnings come from, 100,000s of homes in foreclosure or close to it. Are those people going to be buying flat screen TVs, bikes, computer games, etc?
Again, I direct you to financial ninja, market ticker, and the St Louis Fed charts also read about the Plunge Protection Team. It might sound like tin foil hat time, but do you think the gov’t is going to allow what needs to be done, to be done?
I exited completely from stocks in April and am now waiting for evidence that the selling is over.
On the caution side, the housing market can not stabilize until family incomes can, once again, support the payments of owning a house. The effect that buying too much house has on a family’s budget isn’t only a function of debt and interest rate or even amortization period — property taxes, insurance, utilities, and upkeep all cost as well.
“Preventing foreclosures” feels like wonderful public policy — but it won’t fix family budgets when all of the other costs of home ownership are too high.
People who live in too much house NEED to move to smaller and less expensive housing. When they do, the volume of foreclosures will continue to go up and, imo, there will be another round of losses on home mortgages equal to or even larger than what we’ve seen so far.
“Transparency” in lending and loan losses is the issue. With even highly placed and very skilled corporate treasurers unwilling to lend to the banks and each other, it seems plain that we do not have anything like enough knowledge of which firms might fail next year.
The implications of that for another and, perhaps, much more severe credit crunch are keeping my cash on the sidelines.
When you stop hearing “oink oink” and start hearing porcine squeals of exquisite agony maybe that is time to get back into the market; any money put in the market before the porkers are purged will just go into the trough.
I have left my 401K equity-mix still at a 70/30 equities/bonds mix level. I have not changed existing funds. What I have done is any new money that Me and My Employer contributes is only invested in stable bond funds. Only after the market stablizes will I consider investing any new money in equities again.
Not back into stocks right now, all of my investment dollars are going into distressed real estate. Collecting inexpensive rental houses right now is like taking candy from a baby.
It doesn’t matter when real estate falls further these are income generating properties that will always make something because people need a roof over their head.
Just bought a small farm in fact and now finding some folks to work it for cheap – looks to be a great investment.
I haven’t pulled money from stocks, but did scale back further 401k contributions, to shore up my cash position.
Yes, I could be missing out, but it took 25 years to regain the peak of 1929. Japan has never regained 1991. So, will 2008 be a real long-term shift?
Want to do yourself and the country real service? Keep paying your bills. Pay down credit cards and other debt; you’ll likely get a good return and make your position safer. Then save what you can.
There is nothing the world needs more now than to regain confidence in the U.S. as a capable leader, instead of the hordes of reckless mall loiterers and wealth gamblers we have become.
Now is the time to buy, clearly I would say. Even Warren Buffet said he’s buying. He’s made some good decisions I’d say. I hear about all the people pulling their money out, and my friends I try to stop, but the rest I let them keep selling, I buy for less and when (Not if) the value comes back, I sigh with relief and stop washing down my meals with pepto, and check my 401K again.
I plan on retiring in 2 years, I pulled enough money out of the market in Sept. 2007 to last 5 yrs. from when I retire in 2010, until then everything I invest in will be in stock mutual funds.
The current markets are for those who consider long term a few hours or at best a week. If you are the traditional long term investor, that is years, get out of this market and stay out. Never go back until you are willing to join the day, short, and speculative traders. This market has morphed, by computer trading, into as one said “a monopoly game” and I say a giant Casino. If you are of this type investor this market is for you. All you out there who are long term investors, better get out and stay out.
I have enough cash to see me clear for the next five years, job or no job. Beyond that, yes, I am continuing to buy – in fact, I have just increased my monthly retirement contribution to 33% of my salary. The market may go much lower, but it isn’t going to stay that way forever. Just because I don’t know what will happen short term is no reason to abandon my long term strategy. I remain sanguine.
me…no. But then again I am 30 and have a long time to go. I plan on definitely making some changes when the markets do come back but will stay 100% in stocks for the next 20 years.
If you can wait more than 5 years to see your money, then put it all in stocks. It doesnt matter which ones.
I went 75% into cash 9 months ago. I have recently nibbled at one of my lomg term holdings when it fell to a price yielding a 6% dividend. I still have cash and will patiently wait for opportunities and for the panic to play out.
How low can it go?
It can go to 0. With a z. Zero. How arrogant is it to think that something will turn around just because you want it to? Think I’m joking? What do you think would happen to the market if a dirty bomb or a full on nuclear bomb went off in NYC, LA, and Chicago? You’re talking about housing prices and bailouts and little bs things. You are not seeing all the angles. The big picture. The universe does not care about the DOW. Really.
Didn’t pull my money out, but sure wish i did. By the way, the Japan market tumbled by approx 50% back in 1991. Know where it is today? About 50% (or more) down from that 1991 low. Look at interest rates. The 10 year can’t hold 4%, and now there is talk of the Fed lowering fed funds rate to below 1%. I don’t think we’re even near the bottom yet.
I’m holding tight. If I had more cash now, I would put every penny in the stock market in a broad index. Even if the bottom hasn’t been hit, stocks should move sharply higher sometime in the next 12-24 months. Who can predict when?
I am buying. Long-term I recommend the following ETFs – DIG, XLF, and SSO.
As I wouldn’t invest any money you can’t afford to lose though.
Brant,
Another big difference here is back in 2002 the market was grossly overvalued. PE ratios were in the stratosphere and companies were being valued on price to sales not profitability. That guaranteed that they had a long way to go down. Today we have profitable companies growing by earnings by 35% or more selling at PE ratio’s of 3 to 10!!! On top of that some are paying a dividend of over 4%!! Granted they are not giving any visibility for future earnings but that is why they are the compelling buy. They have been priced for a depression. I will take a company with a 45% return on equity at a 2.90 PE anytime. It’s a no brainer. There are $40.00 stocks trading at $10 all over the place out there. Today we might look back and say that this is that second bottom that showed up in the old charts only we blew right past the ralley stage. Once all the hedge fund guys liqidate then you will be rewarded handsomely because all of that fund money will have to go somewhere. If you want less risk, do what I did and keep the majority of your money safe and buy some call options on the S%P index that have a extended out expiration date. You can buy them cheap now and get a boatload without breaking the bank. That way you can still sleep at night and take advantage of any upside with the leverage. Right now I don’t care what the market does, only where it will be 2 years from now. If it rockets up real fast I can take the profits on the options and then start to enter slowly back in with the balance. The options will recover all of my losses much faster.
Nope. Shares are what matters when you are 29 years old, not dollars.
Right now iam just buying a bunch of cheap stock
HA! I love the people that say the market is gonna “explode back up”. BASED ON WHAT FOR CRAP SAKE?!?! Some new technology like teleportaition or something?
WE DON’T MAKE ANYTHING IN THE US ANYMORE. WE CAN NOT FLOURISH AS A SERVICE ECONOMY.
MBAs ARE OUTSOURCING OUR JOBS WHILE THE COMPANIES PAY MILLIONS FOR THEM TO FLY THOUSANDS OF MILES BACK AND FORTH TO HOME (MARK FIELDS OF FORD FAME!!!)
THE US IS IN DEBT.
ALL THE POLITICIAN ARE CORRUPT (TED STEVENS, AK)
THE STOCK MARKET IS TOTATLLY MANIPULATED TO LURE THE SMALL PEOPLE IN THEN RIP THEM OFF. THE REFRENCE TO A PONZI SCHEME BELOW IS SPOT ON!!!
THE RICH – DO NOT – PAY THIER FAIR SHARE OF TAXES. I’M A WORKING STIFF IN A WEALTHY NEIGHBORHOOD AND ALL USE BUSINESS RIGHT OFFS AND HIDE MONEY OFFSHORE ACCOUNTS. I PAY MORE IN INCOME TAXES THAN THE BUSINESS OWNERS I WORK FOR!!!!
I wouldn’t put a penny in the stock market. I have rentals that pay rent wether thier value goes up or down. Also have a small side business and will use ANY cash to buy a larger industrial building and more equipment and tooling!
I pulled my money out of being invested in any stock about 8 years ago, so I think I’m doing ok. Just bought a bunch at end of Oct when I thought the clearance sale wouldnt go any lower!
Went to cash 2 years ago and missed the rally. Now I’m not affected by the crash. Will probably jump back in once the market stabilizes.
Tim in Michigan. You might be right, but I just looked at the NASDAQ multi year. That was an 80% “panic” 1 yr drop from peak, broader markets less so then. NASDAQ barely recovered to 1/2 peak. Could it be said the broader markets are in the same “panic” now as the NASDAQ then? And there is little economy to bring them back? There is your 80% loss and “recovery” to ~7,500 DOW/750 S&P?
Back Oct last year when I was having my hunch (just wish I could have gotten more out), I was wondering THERE IS NOTHING TO SUPPORT THIS.
My advice to all. Save what you can, live frugally, no SUV, no Gucci handbags, shop thrift stores, I know “spending” is the way out of messes, but these are times you have to look out for you and your loved ones. Eat and shelter is all that matters. For entertainment, get a good book and read on the front porch. I’ve got 100s of books. Have your kids play in the front yard while you watch. Find them a good big cardboard box to play in like we used to, make a fort/club house under a bush, let them have real fun.
We will survive this and the economy will recover if we actually let it, but it won’t with all this crap buying the latest fad thing that your kid just must have and then breaks it 2 days later.
Cash please!!!
Six months ago my adviser strongly advised shares. Later I went to a seminar with a similar theme. Cashies were almost called long term loosers. Well, this cashie is still in cash and happily seeing small growth instead of big losses . . . and I sleep OK at night.
I’m buying but haven’t selected the stock(s) yet because the ones I really want haven’t collapsed.
Meanwhile I am quite aware the stock market is a slow-motion Ponzi scheme.
Or is the stock market merely deflating?
Wall Street merely ran out of suckers to buy its clever financial instruments, hence the endless calls to the government for more liquidity.
Some people hate the idea of “big government” passionately.
Maybe it’s time to put a stop to “big Wall Street” also as they have too much power and they have abused it.
Brant in Atlanta, I have been looking at those old charts also from the tech bubble. I think the difference here is that the current chart is just a straight down line a sure sign of panic, nothing slow about this correction. This has increased the chance that it was overdone. We could bounce through the 8451 low (I mistakingly said 8455) but I don’t think we will go to 5000. Maybe test the tech bubble low of 7591 but most of this selling has been panic and hedge funds deleveraging so they can pay off clients. I think once the LIBOR rates get back to equlibrium and the financials stabilize then we will restore a lot of confidence. Right now everthing is irrational. Look at some of the PE ratios for the companies that have just reported. Granted we have had some poor reports but look at the heavy weights, MSFT,AAPL,IBM, DEERE they are still making gobs of money and people are treating them like lepers. When the visibility gets better for their earnings it will be to late to buy them. Get them while the mood is terrible. My opinion.
I’m out, out out. Stomach can’t take it. Out 3 weeks now and loving life, actually enjoy watching a good low-down selloff day now, as I can laugh at my co-workers fretting their 401k balances. Lost about $300,000 for the year and decided to “lock it in” there. Now I’m all CDs, all 4.7% or better, and I’ll be done with plenty of money to spare at age 62. No I’m not nor was ever rich. Drive safe, go the speed limit, don’t jump in the fast lane and try to beat your neighbor to the finish line. We’ll all be dead someday, why rush to get there?
If anyone else still reading this thread. Check out the two 2001 false bounces in the 01/03 bear market (fell much more after each of these), then the two confirm the floor bounces end of 2002, and then the final up bounce Jan 2003. You can see this on this good CNN site by doing S&P chart and then clicking all data. From the much I’ve read and little I know, we are just now testing that final floor of ~850-900. Back then there was a reasonable economy for the final push up…..is there a good economy now? I’ve read that if this floor doesn’t hold, we go back to 1995 levels, 5,000 DOW/500 S&P (about 70% down total). If you look closely, you can see that real move up in 1995 of the first bull market prior to the tech bubble.
My thoughts are the Christmas season is the final try that this is bottom. If there is the slightest hint that its flat or losing, that’s bad. This market will swing based on the post T’giving shopping news by the minute/hour/day.
I pulled everything out until we get a bottom formed here. Looks like we are starting to establish a trading range here. If we stay above 8455 for a period of time then that will have been the bottom. I just bought a boatload of options on the S&P 500 spiders so I can have the best of both worlds. Most of my money safe and I am leveraged with the options to collect well if there is any quick upside between now and December 2010 so that gives me over 2 years. With all of the money that our government and the world is throwing at this we are bound to have a pick up in 2009.
well, believe it or not i had everything in Gaamco Gold fund until this past March, sold it at about the peak, and my cost basis was about 56 %. I’m no guru, just got REALLY lucky with my timing, and figured Gold would have a decent run up when it did.
Now I thought i was buying on the dip and shoved it all into the market around July when market was around upper 10,000 range. I feel like i went to Vegas and won and am now giving it all back. It sucks, but i’m not bailing out, and still a little ahead of it all.
Anyone with 10 or more years to invest, go shopping! Buffet is right, if McDonalds had 25 cent big macs, everyone would be buying! But why is it with stocks people cant see opportunity ? Pick a good 5 star-rated MorningStar mutual fund and start dollar-cost averaging! With prices where they are these funds are looking more attractive to foreign investors, and the quality companys will come through this mess.
Heed Buffets words: “Be fearful when others get greedy, and be Greedy when others are fearful” .
We’ve seen this before. Fortunes are made and lost in times such as this. I know, this time it’s different, but it always is. It’s a great country with innovative people and we’ll conquer this just like we’ve done dozens of times. I’m a buyer and will continue to bet on this great global economy.
I moved 25% into cash June knowing the worse was yet to come. Problem now is not what the next shoe to drop is, but rather the analyst and pundits not bouncing all over the place. As you pointed out first the concern about rising commodity prices and no sooner did they drop a little then OMG the economy is in the tank. We’ld all be served well in the analyst and pundits would just take a chill pill and passout quietly somewhere for a couple of months. Then may be things could work themselves out.
NO, I just put a substantial sum into an S&P Index account. I figure at this level how mcuh lower can it go. I’m going to keep putting in incremental amounts as the market goes lower, because there is going to be an explosion up once everybody gets the panic out of their systems.
Since the start I had divided my 401k between money market and mid-growth stock/converted to retire at 2030 funds. The money market cushioned the fall down to Dow 8500. I decided to gamble a bit, put most of the money market into the Retire 2030 account at that point. Given the size of the drop, I figured we’re closer to the bottom than the top, and at 47 I can’t really touch the money for another 12 years. Plenty of time for this to recover – and have at least one more recession 
– before I need it. I figure I’d ride the eventual recovery back up, then reestablish my money market safety net.
I agree much with Karen of Texas. All last year I was just wondering how this can hold? I had no knowledge (still have very little), but it was just a hunch. On radio last October I finally found someone speaking my language (NOT CRAMER/KUDLOW, ET AL) although they’re fun to watch, but not to use for financial advise, esp now. Then found some blogs…..google/yahoo financial ninja and market ticker. From these you can find others. Also check out the St Louis Fed charts. Several charts with formerly “calm” many years past of bank borrowings, fed lending, etc have gone straight up and down this year (negative and positive billions).
My feeling is this election and the next two years will determine much about where this country goes for decade(s) if not generation. Fortunately my wife and I (we’re 42 and 33) are much out of debt, no credit card debt, 10+ yr old cars, small reasonable house nearly paid working like mad for two year pay off, rabbit ears on our TV, and shop at thrift stores.
This entire situation will be studied for years, a psychologists/socialogists dream. PhD theses will be written about this.
Lastly if you think this is bad wait until 2010 when the US starts to default on it’s interest payments. We use to pay the interest with the extra money S.S. was paying into the system (heck we funded the Vietnam War on it also) but in 2010 the S.S. surplus turns into a deficit. We are seeing a tiny bit of what will happen because of the Iraq war expenses just about taken up all the S.S. surplus.
Basically this is end game for the US economy.
I hope those buyers are not in a multi story building (1929 memories). Falling markets are like those bad dreams where you don’t hit bottom until you wake up….this giant is still asleep.
LOL good joke about the shoes. As to the stock market we are no where near the bottom. Why the 3 trillion dollars sitting on the side lines are going to be needed to service the 1.5 trillion dollar short fall in the national budget next year and the year after. Ask your self why the national debt went up a trillion this year while the deficit was only 464 billion and you will see the horrible mess we are in.
The Chinese are now self reliant and can trade finished goods to third world countries for raw materials basically they are in the sweet position we use to be in. They do not need dollars anymore and as they cut off military talks with us over us selling 5 billion in arms to Taiwan I do not think they are going to do us any favors. The middle east gravy train has come to a halt so they can not help us.
Americans are still trapped in a downward spiral of lower wages and higher prices (oil is the one bright spot but wait until after the election) so they are either taking money out of their 401k plans and paying bills or not putting any in.
The banks and hedge funds are selling things to leverage down from 30 to 1 even 50 to 1 to 10 to 1 laon to deposits ratio. So they will be selling for years to come.
The only ones buying are fund managers who want to try to keep the price of their funds up to try to get what little money is flowing into the market. But this is like bailing water on the Titanic after it hit the ice berge.
Add in the real economy going down the tubes feeding the laid off people and them raiding their 401k plans.
Am I buying in this situtation no way it’s going to be comeing down for at least 10 years still.
There’s virtually nothing left in the market to pull out. One of the best moves I made in my life was to pull just about everything out back in March. Now if I could just figure out when to put it back in….
Oh no, not buying stocks yet.
While the very absolute bottom will come and go while the markets are gyrating, the big climb will be slow and steady, as always. When the market is stable for a while (that would be for a bit longer then two days), then I’ll think about selected stocks.
For now, pay my bills and save a little cash. We still need to get past the Credit Swap implosion, the demise of revolving credit, adjustments away from calling consumer junk/fad/disposable spending an economy, and the Fed floating a trillion(so far) of bonds next year.
There’ll be plenty of time to gamble on the market later.
I got 70-80% of my 401K/IRAs out October 07 (in fact my old 401K $50K check went over to IRA on THE peak day of about 14,200). I’ve had about $100K in money markets since then (figured mouth of the beast was best place to be among my meager choices). My 401K/IRA portfolio is down ~2.5% this year vs. 30+% for the market.
I’ve been making couple $100 each month since. About getting back in, I figure I’ve got a couple dozen % before I’ve “lost” my “winins”.
I am thinking of starting some dollar cost averaging with some indie stocks/funds I’ve got. Dollar cost averaging, why not start at the bottom?
Yes. I sold most of my stocks several months ago when it was obvious the market had hit a high and the economy continued to slide the wrong direction. I’ll buy stocks again when the american consumer recovers, which isn’t going to happen anytime soon. Until the, the Dow will go below 6,000.
Market down 40% over last year (price).
3Q profits down 10% over last year (earnings).
Buy here, buy now…
Yes, I did. Way too late, but I pulled my money into bonds October 7. After the apocalytic weekend for European banks I expected stocks to go down on October 6, but hoped for the usual rebound the next day. When this didn’t happen either, I pulled the plug anyway because that seemed a bottomless pit. I am glad I did: by October 10 I had prevented 10 % more loss from US stocks, and 18 % more loss from international ones. As of yesterday, October 22, we are more or less back again at October 10 levels, the global super-rally from October 13 notwithstanding. This morning US stocks went up, but as of the time of my writing the S&P 500 is down more than 1 % again . . . I can’t wait to jump back in, but I sit it out for now – who knows the Dow will plunge to 7,500 points? When that happens I am definitely back in the game. On the other hand, if stocks go up unexpectedly, I still have some cushion left for not having been beaten by the market.
Heck no I’m not pulling money out of stocks. That just locks in your losses. As a matter of fact, I’m buying buying buying. When things start back up in a few years, these low prices are gonna make me a ton of money.
No. Dollar cost average is the mantra to live by. Sometimes you can anticipate a cycle bust and get out early. I saw this coming and got out at 12,700 on the Dow. I got back in around 11,000 (I think the Lehman banckruptcy triggered the subsequent dip). At this point I’ll hold and continue to add with each paycheck(so long as I am getting one). Goverment spending, low interest rates, and consumer balance sheet reparations will take place over the next 12-18 mos. The tide will turn and the market will get ahead of it. I want to have a warm seat on the train as it leaves the station. It’s not the same for everyone. If you have alot at risk or are older you may see things differently.
My 2 cents in my 2 comments …
There are obvious steps that may be appropriate for both the short and long term.
- Spend on infracstructures. Roads, bridges, schools could use some attention. This would generate lots of jobs and keep a lot of money in companies in the US (no issues of off-shoring our wealth here.)
- Instead of $700 billion for banks … Save some banks, but, somehow, put billions into the hands of everyone that has recently filed the appropriate IRS form because they were running a small business. The Entrepreneurs of this country can go a long ways towards creating real wealth and jobs.
Now, for my 1 pessismistic cent …
I think that, even after all is said and done, the economy and financial markets will go into a very deep Recession. It is a new interconnect world of 6 billion inhabitants. Our country is no longer the place where new wealth and productivity is generated. The engine for civilization has moved to the Far East. I see this country very quickly moving into close to third world status. Our Federal Deficit, Medicare, and Social Security time bombs will prevent this country from competing in this new world.
I see Dow down to about 4000 next year. Housing down another 30%. Most 401Ks down another 20%.
In economic terms, Deflation will be the term. Cash is king.