Dow drops another 700 points today

[Brian Fein]

The DJIA, Wall Street's biggest financial index, dropped 700 more points today, closing at 8500+ points.  This is the lowest the Dow has been since May, 2003's post-9/11 market slump.  The Dow has fallen over 2000 points in a week's time.

Is it time to assume crash position?  Guess the "bailout" didn't work, eh, George?  What do those of you who have money, especially retirement accounts (IRA, 401k, etc) in the market plan to do to protect your long-term investments?

[Defense54]

The DJIA, Wall Street's biggest financial index, dropped 700 more points today, closing at 8500+ points.  This is the lowest the Dow has been since May, 2003's post-9/11 market slump.  The Dow has fallen over 2000 points in a week's time.

Is it time to assume crash position?  Guess the "bailout" didn't work, eh, George?  What do those of you who have money, especially retirement accounts (IRA, 401k, etc) in the market plan to do to protect your long-term investments?

Fuck everything else, This is my biggest concern today. I really had everything well planed for the next 13 years to retire fully at 55.  I'm concerned.........Deeply concerned. What can you do? One hand says sell..........But to Whom? And the other says to stay and it will bounce back. What goes down will bounce back up. I've lost about 1/3 of my investments as of yesterday. Hopefully this will bottom out soon and start rebounding. The trickle down of this is really going to be scary. Millions of Jobs will be effected. I'm not sure its really sunk in yet .........Some really hard times are ahead people.

[jtex316]

Unfortunately the best thing to do is to stay with it at this time.

Let's say you say "fuck it" and withdraw your entire 401k plan and get a check (is that even possible to do?). You put it in your wallet or in your safe at home or literally underneath the mattress.

But let's say then you want to re-invest in a 401k plan - are you good enough to know which stocks to buy and when to do this? Probably not, so we're all really screwed for the most part. My Economy professor calls this "Market Timing". If you can tell when the best time for you to go back in is, then God be with you (and luck be with you too). It's more of a gamble to do this than the alternative, which is do nothing.

[MyGodWearsAHoodie]

Fuck everything else, This is my biggest concern today. I really had everything well planed for the next 13 years to retire fully at 55.  I'm concerned.........Deeply concerned. What can you do? One hand says sell..........But to Whom? And the other says to stay and it will bounce back. What goes down will bounce back up. I've lost about 1/3 of my investments as of yesterday. Hopefully this will bottom out soon and start rebounding. The trickle down of this is really going to be scary. Millions of Jobs will be effected. I'm not sure its really sunk in yet .........Some really hard times are ahead people.

If you were planning on retiring in 13 months I would be worried.  13 years is a long time.  The Dow will be a 20,000 by then.

[Defense54]

Unfortunately the best thing to do is to stay with it at this time.

Let's say you say "fuck it" and withdraw your entire 401k plan and get a check (is that even possible to do?). You put it in your wallet or in your safe at home or literally underneath the mattress.

But let's say then you want to re-invest in a 401k plan - are you good enough to know which stocks to buy and when to do this? Probably not, so we're all really screwed for the most part. My Economy professor calls this "Market Timing". If you can tell when the best time for you to go back in is, then God be with you (and luck be with you too). It's more of a gamble to do this than the alternative, which is do nothing.

I agree. ^^^^    

[jtex316]

If you were planning on retiring in 13 months I would be worried.  13 years is a long time.  The Dow will be a 20,000 by then.

This actually is very plausible. Brian - the $860B Bailout (remember they tacked on an extra amount), from my understanding, hasn't even been used yet - they are figuring out how to use it now. And, you won't see immediate results most likely - it will take time.

This is just like the Dolphins re-building - ups and downs, but for the Dolphins to go back to the Super Bowl, it's going to take some time to accomplish that.

[bsmooth]

We are still takin git in the ass for awhile on this.

[Defense54]

If you were planning on retiring in 13 months I would be worried.  13 years is a long time.  The Dow will be a 20,000 by then.

Fuck Football...........THATS the kind of postive thinking I dig right now!  Your words to god ears brother..........But I'm still pretty concerned right about now.

[jtex316]

...and just wait, in 2011, we have another crisis to deal with called Social Security. Someone (McCain or Obama) is going to have to weigh the possibility of increasing the retirement age up a couple of years, or to increase income tax to keep the SSN program afloat (By 2015-2020, the rate of money retirees will receive from SSN will be less than 100% of the money put in to the program....scary stuff here too).

[Jim Gray]

Don't panic.  You've already lost the value, so pulling it out now would not necessarily help.......unless this is just the beginning.    I moved investments to safer areas a month ago.  That has helped some, but the difference in losses between a moderate portfolio and an mod/aggressive portfolio is only about 5%.
 
The DOW is under 9000 for the first time in 5 years.   Obviously, I don't know what will happen, but I hope we are approaching the bottom.   

Hoodie is right.  Since most of us aren't retiring, history shows us that the safe bet is to stay where we are and ride out the storm.

[MyGodWearsAHoodie]

Fuck Football...........THATS the kind of postive thinking I dig right now!  Your words to god ears brother..........But I'm still pretty concerned right about now.

We are talking 13 years. 

Remember black Monday?  1987 Dow had record drop.  Where was the dow 13 years later?

Remember the huge sell off after  9/11/01?  The stock market bounced back.

Hell even the great depression lasted less than 13 years. 

[Defense54]

All good advice above^^^^

I just get worried when the Market dropping 700 points is like an unbelievable act a week ago.........and now its becoming pretty much the Norm. Its like Gas for $3.40.  Can you imagine people 2 years ago saying..........Hey I got a great deal on Gas today for only $3.40 a gallon!!? 

[Brian Fein]

No doubt long term that it will rebound.  But, the bailout was supposed to increase investor confidence and get money flowing back into the market, and the exact opposite has happened.

Pulling cash out of 401k is not an option.  you pay 10% in penalties for withdrawing before 65 and then get taxed 35+% - its a big big mistake.  Like Jim, I moved my funds into less-risky areas to mitigate losses.  The question is - when do you reinvest?

I have no doubt that the right thing to do is wait it out, but the market is driven by the masses, and the masses are panicking.

[bsmooth]

All good advice above^^^^

I just get worried when the Market dropping 700 points is like an unbelievable act a week ago.........and now its becoming pretty much the Norm. Its like Gas for $3.40.  Can you imagine people 2 years ago saying..........Hey I got a great deal on Gas today for only $3.40 a gallon!!? 

Everything has a bottom, so hopefully it will hit it very soon and we can deal with the repercussions as it makes its climb back up.

[MyGodWearsAHoodie]

No doubt long term that it will rebound.  But, the bailout was supposed to increase investor confidence and get money flowing back into the market, and the exact opposite has happened.

Pulling cash out of 401k is not an option.  you pay 10% in penalties for withdrawing before 65 and then get taxed 35+% - its a big big mistake.  Like Jim, I moved my funds into less-risky areas to mitigate losses.  The question is - when do you reinvest?

I have no doubt that the right thing to do is wait it out, but the market is driven by the masses, and the masses are panicking.

You can pull out of the market without pulling out of the 401k.  Just move to a CD/Money market fund. 

If you have more than 10 years until retirement you should be in mostly in stocks and get more conservative as you get closer to retirement.  But trying to time the market is gambling. 

Of course you can, and some people do have all their retirement money in CDs and other FDIC insured accounts.  You never lose money and it is nice and safe.  You lose big time to inflation, but if that lets you sleep at night it can be the right choice.