BrockWilt wrote:I dont have a 401k. I would love to have one right now if it would be possible, but my company doesnt offer one. Now is the best time to pump money into your 401k when everything is so low. Stocks are only going to go up from here. It is how a market works ... up then down up then down up then down ... its just now our wonderful president is making things worse and prolonging the stock market plunge ... but with or with out govt help we will come out of it. sooner if it werent for the govt stimulus and spending and taxes and ... u get the point
e.alleg wrote:For those that lost a ton in the stocks the only action is really to stay put and wait. The stocks will go up again, they always do. Will they be back up when you need to take money out, that's the tricky question. Taking money out when the market is down is foolish, if you keep your money in you haven't actually lost anything except on paper. If the company you invested in went bankrupt then you did lose, sorry.
This is quite true historically. Even when all seems gone with the markets things look up in the future. The problem here though is that things are starting to look like they may not return to normal for quite some time. The difference between this recession and previous recessions is credit. Look around and you will notice everyone lives off of credit. If there is no credit from home equity, credit cards, no small business loans, etc then how does an economy come back? The contraction that is occurring will continue for all of 09 and possibly the beginning of 2010. Another thing to consider is our economy is 70% based on the consumer. If the consumer doesn’t come back because credit is gone businesses won’t make as much money. Therefore P/E ratios won’t climb and stocks will continue to sag for many years to come. Yes the markets will come back but it depends on your timeframe. You can’t simply listen to a broker or your financial advisor who down 20% said stocks will come back and then down 30% said this is a buying opportunity and now down 50% said the rally of all rallys is coming. These are the same advisor’s who overwhelmingly missed this 50% decline when the market was still bullish into October of 2007.