The Dow hit a new six-year low when the markets closed yesterday, but have no fear, because the recovery begins today! Well, this year. Er, soon. In ten years (or so).
The truth is nobody - nobody - knows for certain, and you should be wary of anyone making predictions. Why tease you, then, about a date when the economy might either recover or begin to recover? To remind you, reader, to be wary of the claims of those that do make predictions.
What is important is not to panic and not to be afraid. This should not be any more frightening that taking a drive in your car. Your odds of dying in a car accident at some point in your lifetime are 1 in 84, but I would bet you're not going to stop getting in and out of your car. You have no idea what tomorrow may bring; there is no reason to be any more scared by the market than stepping out your front door every day. Part of life is learning to live with the unknown.
The best and only real advice that I can give is this: Take what you know about the world and make sound, logical financial decisions that you can live with in a worst-case scenario, and hope for the best. Visit this index of financial tips entry for additional general financial advice.
Or you could listen to the prescient words of the corporate liberator, Gordon Gekko, who's first-half of the infamous "Greed Is Good" speech seems to apply as much today as it did over twenty years ago.
Well, ladies and gentlemen, we're not here to indulge in fantasy, but in political and economic reality. America, America has become a second-rate power. Its trade deficit and its fiscal deficit are at nightmare proportions. Now, in the days of the free market, when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company!
All together, these men sitting up here (management) own less than three percent of the company. And where does Mr. Cromwell put his million-dollar salary? Not in (company) stock; he owns less than one percent.
You own the company. That's right, you, the stockholder. And you are all being royally screwed over by these, these bureaucrats, with their steak lunches, their hunting and fishing trips, their corporate jets and golden parachutes.
Comments
Love the passage to close this blog as you are correct, no one is really investing in a company so if it fails, the millions they made isn't totally tied in the company and he/she runs away free. I love it when I do see your entries and just remember to keep GS in your mind sometimes
).
But ultimately, when you get right down to it, worrying about this doesn't change what you're going to do about it. People will cut back on whatever expenses they can and try and weather the storm as best as possible.
No amount of complaining or fretting about things is going to make them get better any quicker.
...Twister anyone?
Bozanimal
More on topic, I certainly hope that the market recovers soon, but I admit that despite what looks like a possible opportunity of a lifetime, I have not been throwing money into the marketplace. I just have no idea where we are headed, if anywhere, and my kids depend on me. I need to be able to live with a worst-case scenario, and that does not include plowing money into an individual stock that may or may not be the next Bear Stearns or Lehman Brothers.