Learning from the Stock Market’s Volatile Performance This Week

by RC on September 19, 2008

The headlines at the end of the day Monday read:

Wall Street Sees Worst Day in 7 Years

That was followed by a 120+ point rise on Tuesday, and then a 400+ point drop on Wednesday. Ouch! Several people in my office were talking about taking all of there money out of stocks in their 401k and putting it into bonds or a money market account. And then….

And at the end of the day Thursday?

US Stock Market Rallies Most in Six Years

Now, I am certainly not predicting a rally here, as I have mentioned previously that I cannot predict the stock market ups and downs. No one can. Not you. Not me. Not the so-called “experts”. Haven’t some of the companies that employ these “experts” been going bankrupt lately?

While things don’t look too good right now when it comes to the underlying economics of this country, I don’t know how much further it is going to go down, or if and when it will start to climb steadily again. But what do the pros do in the midst of all this economic turmoil? They go shopping. In Warren Buffett’s case, they go shopping for other companies.

But what can regular people like you and me do?

Don’t stop contributing to your 401k.

Be smart with your money and spending.

Find ways to increase your cash flow.

Eliminate Credit Card Debt.

Above all, don’t panic! I do know, that if I had moved all of my money from stocks to a money market account in my 401k yesterday, I would feel much worse today than I do now. And since I don’t plan on retiring for at least 25 years (maybe more), I am likely better off not trying to time the market. It would be nice if the stock market went up gradually and slowly over the years, without any wild swings. People would feel a lot better. Unfortunately, it does not work that way.

Similar Posts:

If you have enjoyed this article, please consider subscribing to Think Your Way To Wealth updates using an RSS reader or by email to get all of the latest posts and updates delivered for free!

{ 2 trackbacks }

The Financial Blogger | Money Hacks Carnival #32 - Have You Ever Edition
October 1, 2008 at 5:02 am
Finance Fiesta - Procrastination Edition! | Master Your Card
October 2, 2008 at 12:15 pm

{ 2 comments… read them below or add one }

Phil September 19, 2008 at 10:58 am

These are scary times to be living in unfortunately. I think most people are now in a position where they’re trying (or having) to be much smarter with their money. You’ll see a lot of people panicking in this current market.

Keep up the good work on these articles. I don’t see many other people commenting.
http://www.moneysaverpro.com

Reply

RC September 19, 2008 at 10:44 pm

@Phil- Yes these times are a little scary. Hopefully the Fed’s move over the last couple of days will calm people down, and keep people from making moves based on fear.
Thanks!

Reply

Leave a Comment


Money Hackers Network Think Your Way to Wealth - Blogged Directory of Finance BlogsBlog Directorypfblogs.org logo Personal  Blogs - Blog Catalog Blog DirectoryA World of Personal Finance Bloggers Join My Community at MyBloglog!