Many of you undoubtedly have been feeling the stress over the recent financial troubles on Wall Street. I know that it’s had a big impact on me and anyone of you, watching the market go up and down, and holdings with it, is almost unbearable. There is only one thought how not to lose your money. Additionally, many of you are probably getting advice as to do with you personal holdings and retirement savings. Should you take out your 401k and run.
Questions may have had different answer if we knew this was coming, but realistically, we collectively turned a blind eye to the mortgage crisis and mismanagements of funds by the larger financial institutions. Now I’m not suggesting malice, but there has to be learning from this debacle. A government plan to bailout this situation is going to happen. Yes, the politicians are going to add more pork onto this than a pig farm, but it will get done and the economic cycle will continue. There will be ups, downs, and people will continue to earn and lose money. We just try to stay untouched with our savings.
My advice is two fold: first, don’t pull your money out of the market. That’s what i am doing because i believe everything will be fine. Or maybe i think like anyone of you that i will be untouched. Doing so will only further the problem and if you look at the numbers, you’re likely to lose more money now than if you ride it out. If you’re investment in mutual funds with your 401k, these funds will rebound. It may not be in the short term, but can you afford to allow time to heal this situation? In most cases, the plausible answer is yes. Second is to try to leave your personal funds alone if you can. Look at the companies you have invested in, read the annual reports and determine if they are fundamentally sound. Find out how they invest their assets and make an educated decision. Finally, don’t click on the stock ticker for a while. If you have general interest, it can be educational, but if you have money invested, the turbulence will be more and more stressful. Understand that there are people who can and will fix this. By the way if you are interested in my money and why i don’t panic i want to say that my money is insured.
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