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.
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.
If you're new to "Think Your Way To Wealth", get free updates on debt reduction, saving money, and building wealth by subscribing to the RSS feed or via Email . Thanks for visiting!
{ 2 trackbacks }
{ 2 comments… read them below or add one }
Phil 09.19.08 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
RC 09.19.08 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!