bobbyw24
03-03-2009, 06:29 AM
Dow Drops Below 7,000: What Should You Do?
by Mark W. Riepe, CFA, Senior Vice President, Schwab Center for Financial Research
March 2, 2009
As we enter March, the Dow Jones Industrial Average is well below 7,000 thanks to a steady stream of poor news coming from economies and markets both here and abroad. Dire headlines are bad enough, but what's worse is the uncertainty. Does it affect you? If it does, what steps can you take to put your affairs on stronger footing?
Schwab has numerous resources to help you through these tumultuous times. Here, I highlight some that are particularly appropriate right now.
Overall strategy
A mistake many investors make is that their first instinct is to act when confronted with challenging circumstances. In my opinion, it's always better to think first and then act. When it comes to investing, what looks to be the correct course of action in the heat of the moment is often fueled more by emotion than by facts. Taking a moment to step back, collect oneself, and then proceed is usually the wiser course.
On Schwab.com, we have a number of "how to" guides that provide some insights on how to think about your next step.
* If you're nearing retirement, read my related article, "7 Ways to Take Control of Your Retirement in Rough Times."
* If your 401(k) account is the bulk of your portfolio, read, "6 Tips for 401(k) Investing in Today's Volatile Market."
Market commentary
The past few days have been just the latest in a series of remarkable days for the markets. To learn more about what's been driving the economy and market, our Chief Investment Strategist, Liz Ann Sonders, discusses the large revision to fourth-quarter 2008 gross domestic product (GDP), as well as recent market action in "Get on Your Boots: Economy and Market Sink Even More."
* Read Liz Ann's new article.
* Listen to her audio.
Conservative investments
Some investors are finding that they can't stomach the recent volatility of the equity markets, or that the losses they've sustained so far have reached a point where they simply can't afford to place more dollars at risk.
If you're in this situation, it doesn't mean you stop being an investor. What it does mean is that you need to analyze more conservative investments with the same sharp eye that you applied to your equity investments.
The trials and tribulations of the municipal bond market have been a fixture in the financial news recently.
Learn more in our related articles by Robert Williams:
* "Are California State Muni Bonds Secure?"
* "What Are the Risks and Rewards of Closed-End Bond Funds?"
The preferred stocks issued by large banks have come under tremendous pressure. Recent government activity has only added to the uncertainty.
For a deep-dive into our views on the more widely held bank preferreds, read the related article by Robert Williams, "Preferred Stock, Nationalization and the Banking Sector: Impacts and Scenarios."
During poor markets, cash and other short-term investments are a popular safe haven.
Learn more about the different features of these instruments in "CDs and Other Short-Term Investments," by Robert Williams.
Advice for you
It's been said that all politics is local. A variation on that is "all advice is personal." While we think all of the resources above are valuable, we are keenly aware that the most important question many of you have is "What should I do?"
Feel free to speak with your Schwab Financial Consultant to get more specific advice around your situation, or take advantage of our complimentary consultation.
If you're not yet a Schwab client but would like to learn more, a Schwab consultant can help. Call 800-435-4000 to get started.
Important Disclosures
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice.
Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. All expressions of opinion are subject to change without notice in reaction to shifting market conditions.
The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.
(0309-7405)
by Mark W. Riepe, CFA, Senior Vice President, Schwab Center for Financial Research
March 2, 2009
As we enter March, the Dow Jones Industrial Average is well below 7,000 thanks to a steady stream of poor news coming from economies and markets both here and abroad. Dire headlines are bad enough, but what's worse is the uncertainty. Does it affect you? If it does, what steps can you take to put your affairs on stronger footing?
Schwab has numerous resources to help you through these tumultuous times. Here, I highlight some that are particularly appropriate right now.
Overall strategy
A mistake many investors make is that their first instinct is to act when confronted with challenging circumstances. In my opinion, it's always better to think first and then act. When it comes to investing, what looks to be the correct course of action in the heat of the moment is often fueled more by emotion than by facts. Taking a moment to step back, collect oneself, and then proceed is usually the wiser course.
On Schwab.com, we have a number of "how to" guides that provide some insights on how to think about your next step.
* If you're nearing retirement, read my related article, "7 Ways to Take Control of Your Retirement in Rough Times."
* If your 401(k) account is the bulk of your portfolio, read, "6 Tips for 401(k) Investing in Today's Volatile Market."
Market commentary
The past few days have been just the latest in a series of remarkable days for the markets. To learn more about what's been driving the economy and market, our Chief Investment Strategist, Liz Ann Sonders, discusses the large revision to fourth-quarter 2008 gross domestic product (GDP), as well as recent market action in "Get on Your Boots: Economy and Market Sink Even More."
* Read Liz Ann's new article.
* Listen to her audio.
Conservative investments
Some investors are finding that they can't stomach the recent volatility of the equity markets, or that the losses they've sustained so far have reached a point where they simply can't afford to place more dollars at risk.
If you're in this situation, it doesn't mean you stop being an investor. What it does mean is that you need to analyze more conservative investments with the same sharp eye that you applied to your equity investments.
The trials and tribulations of the municipal bond market have been a fixture in the financial news recently.
Learn more in our related articles by Robert Williams:
* "Are California State Muni Bonds Secure?"
* "What Are the Risks and Rewards of Closed-End Bond Funds?"
The preferred stocks issued by large banks have come under tremendous pressure. Recent government activity has only added to the uncertainty.
For a deep-dive into our views on the more widely held bank preferreds, read the related article by Robert Williams, "Preferred Stock, Nationalization and the Banking Sector: Impacts and Scenarios."
During poor markets, cash and other short-term investments are a popular safe haven.
Learn more about the different features of these instruments in "CDs and Other Short-Term Investments," by Robert Williams.
Advice for you
It's been said that all politics is local. A variation on that is "all advice is personal." While we think all of the resources above are valuable, we are keenly aware that the most important question many of you have is "What should I do?"
Feel free to speak with your Schwab Financial Consultant to get more specific advice around your situation, or take advantage of our complimentary consultation.
If you're not yet a Schwab client but would like to learn more, a Schwab consultant can help. Call 800-435-4000 to get started.
Important Disclosures
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice.
Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. All expressions of opinion are subject to change without notice in reaction to shifting market conditions.
The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.
(0309-7405)