Michael on October 14th, 2008
Bookmark and Share

The stock market is hyperactive.

You: Gee, you think?

Indeed.  The last thing I saw this volatile was Joe Pesci in Goodfellas.

You: That guy was explosive!

Fortunately, less people will be murdered as a direct result of this market’s volatility.

You: I sure hope so.

One of the things to remember during periods of economic certainty is that the basics still matter. Arguably, they matter even more.

You: More?

Absolutely.  For example, those who properly rebalanced their portfolios each year wouldn’t have been over-exposed to stocks at the beginning of this crash.  Those who buy stock mutual funds automatically through their 401(k) plans every paycheck (thereby dollar cost averaging), probably have some money that’s actually “up” right now thanks to yesterday’s positive explosion.

Outside of investing, the same is true: get back to basics.  If you’re feeling more nervous about your job security because of what’s going on, let’s hope it’s just healthy paranoia on your part.  Still, you’d feel better if you knew you had your emergency fund set aside, and not simply as a task item on your endless to-do list.

Living within your means by spending less than you make, getting your debt under control, and protecting your family from an unfortunate mishap were always important financial objectives that are only highlighted (but not made more or less important) by the events around you which you cannot control. The moral:  Sweat what you can influence but only for as long as it takes for you to get it done.

You’ll feel much better (and you’ll sleep much better) once you do.

Bookmark and Share

Tags: , ,

Leave a Reply

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>