Stay calm. Diversify. Put some money in alternative investments (commodities, hedge funds, speciality investments). Think about favoring large-cap growth stocks.

And most of all - see if your portfolio needs rebalancing. If you don't know what that is, I'll explain:

You should set up your portfolio to accomplish your goals. So, you'll have certain percentages of your money in the following sectors: stocks; bonds; real estate; and alternatives.

In times like this, one sector will go up, and another will go down. If you look at your portfolio today, you probably have a much greater percent of it in bonds (because they've gone up), and now a smaller percentage in stocks (they've gone down).

Take this opportunity to sell some of the appreciated classes and buy some of the depressed classes. In this case, you'd sell some bonds and buy some stocks. This puts your total portfolio back into the sector percentage make-ups that you are comfortable with.

It also makes you sell high and buy low. That's what it's all about!


NEWSFLASH - The Fed just cut the Fed Funds rate by 75 basis points. They are panicking. You should not. Monitor your asset allocation - it has never been more important than right now.

Good luck! You'll be fine. Don't over-react.

And now.... lessons from 1987... with your host... RodeoSchro

What about if I am just about to invest? Should I hold off till all is rock bottom then buy buy buy.

The bloody US crash is going to plunge the world into a recession.

OK fess up, who bought a house on a cheap morgage and din't pay it back - I blame you for this mess.

It was only a matter of time until recession.

yep, a friend of mine who's in the stock market told me a few months back..."don't believe the hype", we're in a recession.

We've been in a recession for some time, and I think that this is going to be a very long term decline like the 1970's. If you can, try to get as much cash as possible! Cash is king in down times. Then when everyone is screaming at the top of their lungs from the mountaintop about how the world has gone to shit , that's the time to get back into the markets, whether it's the stock market, real estate, etc. More millionaires per capita were created during the Great Depression than during any time in American history.

I agree with every word, Greg. The Fed is panicking. There hasn't been a rate cut this big in I don't kow how long. Even though I'm a broker, I would never tell people to put their money in the market but if I had the funds, I'd be buying my ass off right now. We're in a recession but we've been in them before.

The maret overall seems to be freefalling this moment.

The Dow just dropped over 400 points in the first five minutes of trading! However, it does look like it's beginning to recover a bit, so let's see where it closes today.

728huey said:

I would not have been suprised if they called a halt. It will be very interesting to watch.

PREDOMINANT said:

It's hard to be a market timer. I think I'd sit down with a financial professional, forget about what the market is doing right now, and determine how I want to allocate my money with respect to stocks, bonds, alternative investments and real estate. Then I would ask the financial professional to join with me in deciding what sectors we like within those asset classes. For instance, in stocks - do we like large, mid or small cap? Do we like growth or value? How much do we want in domestic stocks, and how much in international? For our international stocks, do we invest in emerging markets or not, and if so, how much?

There are a lot of questions to ask, so see a qualified professional. In fact, see more than one if you want to, and invest with the one you like best. Always remember this - it's YOUR money. Anyone that pressures you to invest with them is someone that takes risks you will not be comfortable with.

But again, it's hard to be a market timer. You have to make two correct decisions - when to get out, and when to get back in. The odds of hitting those just right are very, very small.

My Bonds are kicking ass right now

The market is just hiccuping. Like it's been doing since 2000. If you're in it for the long haul or at least can hold onto your finances for a year, you'll be fine. If you are trading often and are placing a lot of money in growth stocks or are living off of your stocks, you may want to shift those over to somethign safer. Otherwise I don't think there is too much to worry about.

PREDOMINANT said:

Pay attention and YES buy buy buy. Lots of bargains out there.

The Dow closed today down 128.11 points from the last session. So I guess the .75 point Federal Reserve rate cut did its job of stemming the free fall of the markets for today.

Nevertheless, I still see a long protracted decline in the stock market and economy that could last years. There's simply too many baby boomers who are approaching retirement that are going to try to sell their homes only to find out that they are worth less than what they paid for them, which is going to send the markets crashing. Things are going to get really bad, though there will be brief rallies and upswings. However, until the markets deal with the collateralized bad debt, the economy will continue to suffer.

728huey said:

All the rich folks have been desperate to sell off their estates and down sizing for the past few years knowing this was going to happen, to the point of tears if a sale didnt look like it was going to go through.
Many of the larger homes that you would normally see only exchange hands over very lengthy periods of times have all suddenly came up on the market.

728huey said:

If one invests well and invests in good companies, they should be fine. The market always corrects itself. All of the Baby Boomers have safe blue chips... and while those stocks as a whole are what the Market uses to guage Ups and Downs, they are not completely indicative of all stocks, like growth stocks or penny stocks.

I think when the Stock Market does as it's doing, the older investors get hit the hardest as well as the day traders.

statuesqque said:

They have been doing everything they can to talk our way out of it as far as perception is concerned.

The stock market is nothing but smoke and mirrors. A giant house of cards, as can be seen with the sub-prime housing crisis.

SupaFunkyOrgangrinderSexy said:

I know it really is the 70's all over again and when my friend was helping put my portfoilo together...he axed anything that was connected to housing.

SupaFunkyOrgangrinderSexy said:

That's one way of looking at it. I think the word "recession" brings back horrible memories of the depression or the 80's recession. I think people are way more saavy these days and so it doesn't affect people like it used to.

What's interesting is that the job market is still strong. And no massive layoffs and bankrupcies have been reported like when the dot com bust happened

move to the hills and grow your own food! don't let them tattoo barcodes onto your foreheads

SupaFunkyOrgangrinderSexy said:

Exactly:
KB Homes posted a net loss of $772.7 million.
Countrywide Financial Corp, which services one of every six loans in the country, took $2.7 billion in credit related write-downs and losses.
Today's WSJ has an article in The Economy section, about Citigroup and Merril Lynch each posting billions in losses, last week, that were in addition to previous losses last fall.
I wouldn't invest in anything right now.
Just saying.

Apple seems to be holding up. Leave it up to the Zen dude, and the hype, to keep the tech-savy "spending".

It's reported to have a record quarter, after the close of the day.

xplnyrslf said: