Quick note on what we’re up to here at RMMI
In a nutshell, it looks a lot like the global economy is heading into some stormy weather.
So your hosts David, Joseph and Franco have been getting our lives and loves squared away over the last few weeks. We recommend you do too.
This is an excellent time to contact your broker to ensure your financial well-being is preserved, to anticipate changes in business practice at your place of employment, and reflect a bit on what you find necessary to live, not just convenient or preferable.
Such times come and go, always have, always will. They never last all that long in retrospect, but while they are ongoing, a little preparation beforehand pays off!
Feel free to add a comment on your personally economy!
3 Responses to 'Quick note on what we’re up to here at RMMI'
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Well, a lot of the current problems in the US were due in large part to the Community Reinvestment Act; whereby banks were compelled by government to give loans to people who otherwise could not afford them. That’s my understanding.
In any case, I was going to start investing–probably with Fidelity, now that I have a good job. But I’m not sure, with things being what they are. Anyone looking to take advantage of the current situation to invest in a few choice companies? Please share! Lol.
Harold
1 Oct 08 at 7:27 pm
I am writing this on Oct 10. As of now the DJIA is 8227, down from a high of about 14,000. That is a mega sell off, 40%! Shoooeeee!
I think it has to be considered as close to corrected at this point. The various central banks are pouring cash into the world markets, and at some point, the smart guys will begin bargain hunting.
The problem is primarily in the banking and finance system, not manufacturing, but a major credit crunch does hurt them. The stocks are not just Monopoly Money, unlike some of the crap the high finance guys have been selling each other. The stocks represent real shares in real companies, and most likely will turn around. For that matter, the sub-prime mortgages may not be performing, but they also represent ownership of real property, which still has real value, and is an asset that historically goes up in value.
I know it is hard to think this way in a panic, but the only way to end a panic is for people to take their fingers off the panic button. Somewhere there will be a bottom to this, and the truth is, the faster you nose dive, the faster you get to the bottom. A buying opportunity will emerge at the end of the dive. People who have cash and are smart shoppers will pick up some real bargains. Once that begins, the worst will be over, and the world economy will pick up.
I suspect that many of the old common sense rules on investment will return, like the basic concept that you can’t play the game unless enough of your own money is on the table to make you take it seriously, having a real wall of separation between those who create, rate, underwrite, and sell investments, and rewarding financial managers for the long term results of their decisions, as opposed to today’s sales numbers. In the end, these practices are the only ones that insure long term orderly growth and stability.
Remember, you should plan for a recovery. If it happens, you’ll be well positioned. If it doesn’t, you’ll be in the soup line with everyone else, whatever actions you take.
Silvertree
10 Oct 08 at 8:41 am
I’m feeling it.
I could move back into the market in an instant, but I won’t.
What I see at issue right now is that consumers haven’t actually started paying down debt for real. And when they start doing that, earning are going to ramp down for many quarters in a row. While current P/E for a lot of companies looks pretty good right now (i.e., oversold, and that’s IF you trust their balance sheets and I don’t), what they are going to look like with people putting 10% into savings every months could be a totally different story.
But, that’s me.
David
10 Oct 08 at 4:59 pm