Don’t push the panic button (yet!)
Listen, I know all the news lately has you worried. We’re facing a global economic recession and that is very scary. But in spite of all the latest happenings, life should go on. So, in spite of the paper’s headline and what your co-workers are chatting about around the water cooler here are some tips that assure you panicking (just yet) is not the right move.
As I mentioned in my post, Bargain stocks, a good deal, one of the things you can do right now is to take care of new money coming in. This gives you an opportunity to put funds in those areas where contributions are low.
Another thing I strongly suggest is that you look at how your old money is invested and who it is invested with. Call your money manager and get help with this. What you’ll likely learn is that your money is safe but you’ll also learn about where your assets are and what you can do to make sure they are protected. Word of caution you’re stripping money from your retirement savings and future gains because compound interest wipes away that opportunity as does annual fees that are more than 3% a year.
If you’re thinking of buying or selling, hold off. Any rash moves could be detrimental. And this includes cashing your check and storing money under the mattress. Remember if you sell you stand a big chance of missing out on higher returns when the economy recovers.
And finally, diversify. Diversify. Purchase index funds (See Total Stock Market Indexing and Total International Equity Indexing). Index funds enable you to own the whole market. This means instant diversification and less exposure to risk—a money cushion should one of your stock completely bottoms out.
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Tags: bargain stocks, index funds
This entry was posted on Monday, November 3, 2008 at 12:17 pm and is filed under Financial Education. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
One Response to “Don’t push the panic button (yet!)”
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Jane Says:
November 4th, 2008 at 11:24 am
I am holding my Vanguard mutual funds and hoping for the best. In 2000, I held too, and made-up the money rather quickly. And I will research index funds per your advice. Thanks.
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