Wall Street and you. Does this turmoil stuff matter to the average joe?
Posted on September 15th, 2008 – 4:43 PMBy Kara McGuire
I spent the day writing a Q&A on that very topic. In a nutshell, of course it matters, but there’s not much to do.
Here’s the link to my story. In the meantime, what questions do you have about what’s going on on Wall Street?
And what do you do to avoid abandoning ship? It’s hard to watch the stock market gyrate and do nothing.
My portfolio is now down roughly 15 percent (that was as of Friday so it’s down even more after today’s more than 500 point drop thanks to my heavy international exposure (it would be worse if I didn’t own small-caps and global bonds).
10 Responses to "Wall Street and you. Does this turmoil stuff matter to the average joe?"
Small caps & a REIT are the only areas where I’ve seen gains in the last 6 months.
No need to abandon ship. It could be a great buying opportunity for some…and there are other positives in the long-term. For example, check out rates on fixed-rate mortgages - dropping daily and I aim to lock a re-fi by week’s end.
I am not close to retirement, so I just figure Wall Street is having a fantastic sale and that my investment dollars are buying lots of shares that will all have increased in value by the time I retire. If you have any extra cash, now is *the* time to invest. But if you are retired, or close to it, this market is financial hell.
I am trying to do my part to turn this mess around. I am picking up a house and was able to get a mortgage rate that was .875 lower than when I first checked into the rates I would qualify for. But like Kara, my portfolio is down significantly.
I have been contributing to a pre-tax 401K but now I am questioning whether to switch all new contributions to a Roth IRA is a more sound strategy. With billion dollar bail outs, war costs that aren’t part of our trillion dollar deficit, Medicare/caid, etc., I can’t imagine a future where I would pay less taxes in the future than I do right now. Does this strategy make sense?
Glad to see everyone is still delusional that growth is in our future. I would suggest cashing out all your 401k and 403b accounts now. Do the world a favor and buy a new SUV. Drive that baby while your job lasts. If we all do this, eventually everyone might realize the issue at hand and see there are limits to our insanity. Sadly, as we all know, it’s mandated that those funds stay and get repaid if you do tap them out of hardship. No new SUV and nice buffer for the folks with life rafts. Too bad all the poor working stiffs will have to ride this out strapped to the deck.
Buying into this market seems like utter insanity to me. Even GE is way off today.
I can’t begin to imagine what’s going to happen after WaMu and Wachovia go belly-up. And then Morgan Stanley and Goldman Sachs after them.
MS: -35%
GS: -25%
WB: -20%
WM: -10%
Not really. But, the government bailing out companies. I don’t get that, because the Republican administration talks about Reagan all the time being great. Reagan was against government intervention and takeovers and regulation. Now the current administration is doing it and McCain is talking more regulation.
I just don’t get how they could sway so far from Reagan’s message.
“I just don’t get how they could sway so far from Reagan’s message.”
I call it the Republicans’ Accidental Socialism. By over-deregulating the markets (for instance, repealing Glass-Steagall), the financial industry was closer to anything-goes anarchy than organized capitalism. In their zeal to remove government influence from the market, they created an environment that required government intervention. That’s Irony.
Steve– The new Republicanism in a nutshell:
Privatize social security, nationalize the banks.
I’m not sure what makes me angrier about the AIG bailout, the fact that just a few days ago the AIG execs turned down a private equity solution because they would’ve lost their severance pay, or the fact that AIG moved their incorporation status offshore a few years ago to avoid paying taxes.
