Things could be worse, and probably will get worse before they get better.
Shortly before the November election my husband and I discussed transferring our 401k and IRA accounts out of stock funds and into money market accounts. I talked to a few people, read everything I could find on the subject and decided I couldn’t stand to lose any more of our savings.
The Dow was at about 8200 at the time and the way I saw it, we had only lost the earnings on our savings. We hadn’t yet lost the funds that we had worked for and saved. My husband was on the fence, thinking getting out while the market’s down is a terrible idea. In normal times I would agree, but I didn’t believe we were living in normal times. I asked him “What if the Dow goes down to 6000?”
The following day I called my broker and I got out. I called my husband and begged him to do the same. I told him foreign markets were up that morning and it would be the best time to get out; and if McCain managed to win the election we could get back in. As it happened, the Dow went up to about 9000 that day. It turned out to be a good day for me but my husband stayed in. So things could be worse, although we’re still losing money every day at least we’re losing less.
Today we see the market has had its worst month since 1933. The Dow closed at just over 7000. Those who predicted the Dow could drop to 6000 don’t seem so loony anymore, do they? There’s no indication the Stock Market’s going to get any better any time soon. Why would anyone invest in anything today?
When the president attacks the Stock Market and bankers he’s really attacking all of us. My husband and I aren’t wealthy. We’re hard working middle class Americans. Sure, we’d like to be wealthy some day but that looks to be less and less possible. We’ve saved for years in our 401k plans which have lost about half their value.
Many of us believed an Obama administration would be unfriendly to business and the markets. The extent of their hostility is now only coming to light. The Demcrats even took The Wall Street Journal by surprise with their assault on the free market.
Under normal circumstances I’m a pretty optimistic person. But I’m also realistic and these are not normal times. I haven’t seen anything like this in my lifetime. (And yes, I was alive when Jimmy Carter was president.) In times like these when you hear “It could be worse” beware – it’s no longer an optimistic expression. It’s now a prediction.
Update: After writing this post I watched Neil Cavuto’s “Common Sense” on the DVR. “President Obama is sticking it to Wall Street.” He’s right on topic so I thought I’d share.
