When the market closed yesterday, the confusion and exhaustion caused by the recent events on Wall Street were escalated even more. The market suffered its biggest single-day loss in about 20 years after the House rejected the $700 billion bailout bill and stumbled back to the drawing board. The New York Times reacted to the news by providing a Q&A for the average saver and investor, and I've selected what I consider the four most relevant topics they covered.
- Why did the stock market fall so far so fast on Monday? Fear is likely the biggest factor. It could be a while before businesses have access to the short-term loans they need to operate a profit-making venture.
- My retirement portfolio has been wrecked by this. How should I respond? Keep saving and contributing enough to your 401(k) to get your company's match if it offers one. Because your savings have taken a beating they will need more time to cycle back to a place where you can retire comfortably.
See two more sets of questions and answers when you read more.
- Is it time to buy stocks? It's a gamble: You could lose big, but you could possibly (eventually) see gains when the market comes back.
- I’m a long-term investor and prefer not to see my retirement balances as real numbers for now. So the crisis doesn’t feel like it has hit me financially yet. Should I be doing anything defensively? Now more than ever you should aim to have a few months living expenses saved in case of job loss or unpredictable expenses.
i've been having a lot of conversations with my fiance about the market and how we could try to buy stocks really low in the hopes that in 5+ year they will be back up - and if we had the money we would do it - regardless of how risky it sounds right now. it's a tough thing right now - so many people have lost so much that they've saved for retirement, but i think that we will see things get better - they can't really get much worse can they?
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