Monday, January 28, 2008

Are You Scared? Here is my opinion!!!!

Today's Economy and the Media:

I am about to share my personal thoughts on this topic. These do not represent the company I work for nor should they be taken as personal advice to every person out there. You should contact your financial professional for a review if you are concerned...see my disclaimer at the side bar...talking about money makes me nervous in this type of a setting, however, this is on my mind. I am so upset at the media during times like this and it drives me crazy that they are scaring people who are simply innocently unknowing about how things work...that is my rant for today! :-)

I shudder to think of all of those people selling at a loss because they are afraid thanks to those who are looking for a news story!

The media is doing its best to bring gloom and doom to our financial markets and to bring a recession to the States.

Are you listening?

Are you afraid?

Whether you need to fear depends on a few important things...

How are you set for emergency funds? It is wise to have some money set aside in case an emergency should happen...three to six months worth is good.

If you are invested in stocks or bonds is it the right mix and risk level for you?

I had a client for a long time who would panic each time the market fell. I would encourage her to hold on until prices came back and then we could move them to something less prone to the changing of the markets. However, when the prices were up she would not move that money...she loved the the cycle would continue. How are you when the market fluctuates? If you are in it for the long term and are continuing to invest on a regular basis you should be rejoicing during the "down" times. You have just hit the motherload of sales. Each dollar going in now is purchasing more shares.

If you are in the process of taking money from your retirement accounts, this drop in the markets is scary. I like to place my clients retirement into a few different accounts. A more stable returning fund for the money to be drafted from and then a couple of more agressive funds for the longer term growth. If you are set up in a similar way you need not fret the downturns that are healthy in a market.

Can you imagine a stock market that went only up? Pretty soon no one would be able to afford to invest. We have seen trends where the pricing has gotten pretty high.

History has shown that fluctuation in the markets is to be expected and is healthy.

As for a recession...are we headed for one? I don't know. One thing I am fairly certain of right now is that this is not it! We have only seen a slowing in the growth pattern...not the losses that must continue for a certain period of time before it is actually a recession.
Yell at those talking heads on the TV
any time they talk about this recession!
I do!

Work on eliminating debt...but not at the expense of growing a retirement account. It is possible to do both at once.

A review of your budget would show us the debt load and the income stream.

Oh, I had better save this discussion for another day...It deserves it's own post!

Love to all of you...
Fear not!
Do take the time to review
your plan
and make sure you are not
going to be hurting in case of
a severe downturn.
This should be a call to action
not a time of panic.
If you are not planning to pull money
from your retirement in the next five years
or you have enough money in the account
you are pulling from for about three years...
relax and invest all you can afford to put away...
after you have a little nest egg set aside
for the unexpected leaky roof
or the expired furnace.


Mrs. Rabe said...

Here is my two cents...

The press is influencing the economy by writing negative reports, using "scary" terms etc... There are natural corrections to the stock market. The mortgage issue was inevitable -people desire to live at a level that is beyond their means. They financed houses that were beyond their means, mortgage companies made the way for them to finance and viola - they could not pay for them ultimately.

As for unemployment in states such as Michigan - I have family there. I have cousins who have been out of work for a while - they are not working because there is no work in the house painting or whatever. Instead of looking for any kind of work, they just let their wives work, and they draw unemployment. They certainly have money for cigarettes and beer...

Sorry this was so long....

Kari & Kijsa said...

Thanks for this post- you sound like one of our favorite radio programs- Dave Ramsey! great advice!!!

kari & kijsa

Terri and Bob said...

I am worried because we aren't prepared. I think my job gives me false security (education) and I have to learn to get over that!

Miss Paula said...

Mrs. Rabe says...They financed houses that were beyond their means, mortgage companies made the way for them to finance and viola - they could not pay for them ultimately.

And now the government wants to bail them out. Maybe they need to pay big consequences instead of us paying it for them...

There are jobs too. If we closed the borders there would be ton's of jobs but these jobs would be beneath too many people, shameful. I would rather sit around and let Mr/Mrs Jones pay my way!!!!

Alicia said...

Thanks for this post Becky! I can honestly say that Ryan and I have enough funds set aside, I think we have done well with our money. Unemployment is just terrible and I thank you for this great reminder of savings, cuz you just never know!