Monday, January 21, 2008

Picking Up The Pieces

Tomorrow looks like it is going to be a blood bath for the bulls... The Dow futures are down as much as 520 points as global markets around the world are being hammered. If you are a long-term investors these are the hardest times to take. It is tough to see your hard fought gains go down the drain as the bears take over and short everything in site.

The fact of the matter though, is that stocks have outperformed every asset class over a 20-year period. If you are in it for a the long haul you will be alright, in fact you should be doing some buying of quality companies on sale as the dust settles and people realize that the global economies aren't just going to collapse.

Technology companies will continue to make money, alternative energy will still be a huge growth area, whether or not a bank or insurance company goes under. People will still consume, and companies will still make money...

Most of this decline is simply due to the fact that the banks lent out money to people who couldn't afford to pay after they jacked up rates. I mean isn't it the banks job to make sure it's clients can payback loans even if interest rates jumped? Either way, there is one simple solution and that is an emergency fed meeting, and a large rate cut. The bulls have been on the sidelines simply waiting for the next fed meeting. If this doesn't happen tomorrow it will get ugly... very ugly.

Well, Mr. Ben Bernanke, now is your time to shine...

1 comment:

  1. Totally agree with you... i think it is now a given that the markets are going to crash and crash big... only question left is when will the redemptions start... that's when the bottom really falls out of the market...