What a few wild weeks we have had in the financial markets! In times like these it helps to review your long term plan and remember why you are even in the stock market! As crazy as it has been you could ask why you are even in CD’s and money markets!! What I have to ask myself is this: Did I not know this was brewing in our country with the real estate market and frivolous lending? Of course I would have never guessed how extreme this financial correction has been but when my house was appraised for well over what I KNEW it was worth and a loan offered accordingly I suspected that this was happening with everyone around the country. Did you? Sometimes I just have to remind myself to pay attention to what is going on.
The other exercise I like to do during challenging times is look at long term charts for perspective and remind myself that I knew without a doubt that the stock market was going to move up and DOWN! A long term chart of the S&P 500 index shows that the market topped around 1576 early last October and the bottom thus far was 1133 the week of September 15. The S&P 500 closed last week around 1213 which is pretty far up from the low on September 15 a good sign however yesterday the low was 1106. A long term chart reveals that the S&P was trading near these same lows in October 2004. Ok I can handle that. Will it go lower? No one knows for sure. It will be interesting to see how the market closes the week and if it is able to close above the September weekly closing low of 1133. The market action certainly seems directly related to the bailout plan.
As with so many things in life I try to learn from the past look at the present with a plan to move forward and remember that this too shall pass. Join us for a free teleclass on October 6th entitled Reading your Brokerage Statement to learn more about monitoring your account’s performance during these volatle times. Please sign up at TheFinancialWoman.com.