Wow, today the Dow dipped below 9,000. These certainly are trying times for investors like you and me. But at the end of the day what can we do about it? I look at it this way, if this is armageddon and I’m going to hell in a handbasket, shifting my money from the market to treasuries is not going to do a heck of alot of good. I’m screwed either way. If there are no jobs and no economic growth what does my nest egg mean for me anyway…I’m 30 for God’s sake.
Let’s say I let this crisis make me a more conservative investor, sticking my money in treasuries for the rest of my life. Getting 1% over inflation isn’t going to help me much in the long run. My savings rate is going to have to be pretty damn hefty to live for 30 years into retirement.
I woud much rather take the market risk that our country will not grow as a capitalist economy than the inflation risk of parking my money in low yield investments and outliving it! We are at a 39% decline right now. We have seen this in the past and thrived. I believe in the economy and what the future holds for our country. I know I have naysayers, many even in my family. But I still believe in modern portfolio theory and our economy. Only time will tell.
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