Don't expect stocks to trade higher by the end of the year and think we may see a dramatic sell-off in the weeks to come. If we get a sell-off, you can use it to buy some strong stocks on the cheap. If you expect to need cash in the next year that you currently have invested in stocks, I would suggest gradually using rebounds in the market over the next few weeks to exit some positions. This is a good time to have an extra cash cushion. I really don't worry unnecessarily about my bank(s) failing. There is the FDIC that offers protection and personally I don't keep more than $100k lying around in a bank.

 

I haven't invested any major new money in my portfolio in the past six months, except for some I put into a new international wind energy fund. I do still have my automatic monthly deposit to my stock pool, which my broker then uses to purchase whatever with when it builds up. Most of my money lately has gone down the toilet, so to speak. Once I pay off this remodel, I'll need to start looking at what to do. We are all pretty much in the same boat. Unless you see some really great deals out there, I would think hold and wait is the option for now. That's mine.

 

Volatility coupled with a decline in home prices and additional failures, especially in the financial market. I apologize, I could not find the quote from Jamie Dimon that I like to use. Chase is one of the few major financial institutions that's still doing fine.
Jamie spoke to shareholders and employees ~3 months ago, and at time he made his statements that the economy would not turn up for ~18-24 months then.

IF Washington continues to do nothing about the state of the economy then this will be a long and cold winter.

Before you ask, what do they need to do. REGULATE the financial markets. I believe that it was Carter that deregulated them, and they have done some very nutty things since, (derivatives for one). There needs to be regulation on investment banks, they basically operate with little reserves.

I am not a person that understands all the intricacies of the financial markets, but I read and I am certain that "The fundamentals are good" at this time is a foolish statement.

 

Pure and unadulterated.

 

[QUOTE=Zippy,Sep 16 2008, 07:43 AM]Before you ask, what do they need to do.

 

I'd bet not many young couples have that kind of financial security. With mortgage payments, child care and the cost of living, unless they are both earning decent salaries, cash you can put aside and forget about is probably a plan that ends up on the back burner. I know in our younger days, our rainy day fund would not have carried us far at all.

A family member (not immediate) has just faced a health issue that will keep her out of work. She and her husband had a bigger mortgage than her parents thought they did. Now, the parents (in their retirement) are helping them out financially. Not a good scenario, but I'd bet as more young folks face loss of jobs due to lay offs, the parents may just end up lending a hand, by lending them $.

Back on topic...it's going to take a LOT to convince me to ever put money into anything other than very conservative investments. If we can get any kind of recovery from this, I will begin the process of having things moved to that area.

 

Thank you Martha, this had completely slipped my mind.
Well you know, we are just "nation of whiners" and ther really isn't an economic crisis. Thank you for your wisdom Mr. Gramm.

 

I'm also totally convinced that Phil Gramm's reasons for tacking on this amendment to a critical bill had ABSOLUTELY NOTHING to do with the fact this his wife was on Enron's board of directors. Now, if McCain wins, will Phil Gramm be appointed Treasury Sec'y? Wouldn't that be the right spot to spotlight his accomplishments?

 

There is a marked irony here.
The crash of '29 was largely caused by "investors" who were heavily relying on margin accounts i.e. borrowed money to invest. of course they were borrowing against paper gains based on the market.

fast forward 80 years.
The market is slowly crumbling because all of the brokerage houses are heavily leveraged in derivatives.

 

I've always heard that recessions last, on average, 6 months. I haven't been too worried, thinking things would bounce back before my elusive, ever-moving-forward retirement date. I hadn't even studied the Great Depression. Unfortunately, I just did a quick read and this comment is scaring the crap out of me:

The Dow did not return to pre-1929 levels until 1954!

Unfortunately, I just don't have that long to wait!