April 1st, 2008
Many banks have suffered tremendous losses as a result of the subprime lending mess. Some are saying that the worst is over. Can that really be true already?
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February 21st, 2008
A recession economy doesn't have to destroy your financial security. In fact, sometimes a recession can help grow your financial security.
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February 17th, 2008
If you don't know what a recession is and how the very definition of one affects you, read here.
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February 16th, 2008
A short guide on what to think about the upcoming recession and how to keep your sanity intact until it is over.
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February 16th, 2008
If you’ve read, seen, or heard the news in the last month, you likely know about the great doom and catastrophe that is upon us: The Recession. Or, the signs of A Recession. Or possibly the worries of A Recession. This has raised the blood pressure of many people, myself included, with visions of financial ruin and investment chaos. The real question is, what can we do to keep ourselves from not only burning out our investments, but also burning out our psyches with the current market conditions?
First and foremost, and I can’t stress this enough, Don’t Panic. We’re talking Hitchhiker’s Guide big letters Don’t Panic. The number one surefire way of both losing your sanity and your money is by panicking and making an impulsive decision. Unlike the Wall Street big shots, the ability for the average person to take meaningful short positions is pretty much nil. They can take short positions, they will take short positions, and many are likely loving the fact they can play the market both ways, up and down. Trying to beat them at their own game will only give you a premature heart attack.
Don’t fuel the panic, don’t sell on downswings and buy on upswings, it’s the best way with this much market volatility to end up buying high and selling low. And the only people who make money are those on the other end of your trades. If you’re here, you’re obviously not a day trader, you’re in it for the long haul. You believe in the market’s ability to make 7-10% decade by decade. This isn’t going to change any time soon, and especially isn’t going to change given the fact that we haven’t had a single month of negative economic growth, let alone the 6 required to truly be a recession.
Your sanity will thank you for sticking this out, not worrying about daily ups and downs, and really, not paying minute by minute attention to your stocks and funds. The more you watch them, the more nervous you’ll become, and the more likely you’ll be to make an emotional decision that ends up being a mistake. Don’t sweat the small stuff, ignore the DJIA, maybe only check the numbers a couple times a week, if that. If your investments were good a month ago, nothing has changed so drastically that they won’t be good a month from now. Think long term, stay long, don’t panic.
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