Seeing the greatest single-day point drop in the Dow is probably not the kind of history anyone wants to be living through right now. The failure of the bailout bill to pass caused a big freakout in the market, which thought we were going to get a bailout today. But before you click the button to transfer all your investments to 0% return T-bonds (aka I give up on investing), first ask yourself if that’s really in line with your long-term investment goals. Secondly, realize that point-wise it might the greatest drop, but it’s not the greatest drop percentage-wise. In other words, we’ve been here, and bounced back, before. If you’re decades away from retirement, today’s plunge is a buying opportunity. Here are some thoughts about fighting the urge to panic.
investing
Poll: Do You Support The Bailout?
Lawmakers are hashing out the details of a huge taxpayer-funded bailout of Wall Street in an attempt to keep afloat the system of banks whose willingness to lend drives this economy’s growth. Constituents have flooded their representatives phone lines and inboxes with with their heated reactions. What do you think?(Photo: Getty)
Warren Buffett Buys $5 Billion Worth Of Goldman
Warren Buffett buys $5 billion in Goldman Sachs stocks, causing a subdued “yay” to rise among investors. Is the contemporary equivalent to J.P. Morgan helping to calm the Panic of 1907 by walking onto New York Stock Exchange and buying bank stocks?
Understanding The Panic Of 2008 In 15 Easy Steps
If you’re wondering how we got into the big money mess, Kiplinger has a nice and easy 15 step guide to the market meltdown. They trace the origins back to 2000, when the Federal Reserve made the federal funds rate, the interest rate banks charge each other for short term loans, very low. Then we go through the speculative bullshit of the subprime mortgage market, the various imaginary castles built on top of it, and then just how everything went to pot once the naked emperor was revealed. No blame-casting, just the straight up facts.
Deposit $75,000 With TD Ameritrade And Get A Free iPod! OMG!
We guess there’s really no point at which you’re “comfortable” enough to not be tempted by a FREE iPOD! OMG! Reader Jonathan forwarded this email from TD Ameritrade in which they tried to entice him to deposit either $75,000 or $50,000 in order to get himself a free iPod Touch.
New Super Agency Proposed To Buy Up All The Very Bad Loans And Save Our Financial System
Markets rallied in late trading in the biggest gain in six years, emboldened by news that Washington wants to create a new agency that will buy up ALL the bad loans on these financial companies’ books. The initiative would be an attempt to fashion a holistic solution instead of bailing out each individual bank as it fails. This would cost many more billions of dollars and require Congressional approval. In order for all those CongressCritters to keep their jobs, there is talk that the deal would be packaged with another stimulus package perhaps including more rebates, along with food stamps and unemployment benefits.
How Wall Street Lied To Its Computers
The people who ran the financial firms chose to program their risk-management systems with over-optimistic assumptions and to feed them oversimplified data.
Personal Finance Roundup
5 Simple Steps to a Successful Cover Letter [Yahoo Hotjobs] “[Here’s] an easy-to-follow, five-step formula for cover letter success”
What To Do In These Uncertain Financial Times
The housing crisis. The stock market plunge. The banking industry in shambles. What’s a person to do in the midst of all this financial turmoil? We thought we’d offer our suggestions for making it through the rough waters many of us are facing:
What Types Of Accounts Are FDIC Insured? Are My Investments Safe?
What accounts are FDIC-insured? Which aren’t? Now that a fund that markets itself as the world’s “first and longest running money fund,” suddenly found itself in the nearly unprecedented position of having to “break the buck,” we thought we’d help clarify. Here we go:
Signs Of The Apocalypse: Even Money Market Funds Are Losing Money
In the history of money market funds, says the NYT, only one had ever “broken the buck” or actually lost money… before yesterday. On Tuesday, the managers of a multi-billion dollar money market fund announced that their customers might lose money in the fund– a type of investment that is considered as safe as a savings account.
What Merrill, Lehman, And AIG Customers Need To Know
NYT’s Ron Leiber breaks down what you need to know and do if you are or were a customer of Merrill Lynch, Lehman, or AIG…
Lehman Files For Chapter 11, BoA Buys Merrill Lynch
Bankers worked hard over the weekend to prevent the American financial system from imploding.
- Lehman filed for Chapter 11
- Bank of America bought Merrlil Lynch
- A special trading session was opened Sunday from 2-6pm to allow traders to try to unwind their positions
- The Fed is expected to temporarily make it easier for banks to borrow from the government
- European Central Banks stand ready to pump billions into the global market
- Washington Mutual’s new CEO’s disclosure of further writedowns and setting aside of capital calmed investors and stemmed the massive selloff of its stock
Analyst Misinterprets Date On UAL Story, Stock Nosedive Ensues
Here’s what really happened with United Airlines’ stock losing 99% of its value on that bankruptcy story from 2002 that people though was new. This is what happens when you let the robots do your thinking for you…
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Now that the magic accounting party is over, Fannie Mae and Freddie Mac are to be removed from the S&P 500 starting Wednesday. The minimum market cap a company needs to be allowed in the index is 5 billion. Freddie’s market cap is $614 million and Fannie’s $1.04 billion. [AP]
6 Horrible Investing Mistakes
It’s scary times for investors, so Bankrate has “6 Deadly Investing Mistakes” to avoid, most of which involve you not freaking out.
Personal Finance Roundup
Four Ways to Improve Your Resume [Yahoo Hotjobs] “Here are four tips on how you can power up your resume for today’s more competitive job search arena.”
You’re dead: Where’s your 401(k)? [MSN Money] “If you should die before spending all your hard-earned retirement savings, any number of things could happen to the remaining money. Don’t let it fall into the wrong pockets.”
7 Secrets to Picking Great Funds [Kiplinger] “These methods will help you choose wisely and give your portfolio a boost. Some may surprise you.”
When Should You Downgrade Your Car Insurance? [The Simple Dollar] “How do you know when the time is right to downgrade your car insurance?”
4 Ways to Reduce a Gadget’s Power Drain [Smart Money] “Here are four ways to cut your gadgets’ energy consumption.”
— FREE MONEY FINANCE (Photo: PaulBarwick)
But How How Does The Bailout Affect Me?