Stay with a sure thing?

The average person that has money in the stock market is basically wondering one of two things. First, should I get out of the market now and put everything into a CD where I know I won’t get a great return, but at least I won’t be loosing money? Second, why didn’t I get out a long time ago and put my money into a CD where I know I won’t get a great return, but at least I won’t be loosing money?

The craziness of the market has driven a lot of people to pull out of the market out of fear of how bad things really could be. During times like this it is good to focus on exactly what your long-term goals are and how you expect the market to meet those goals. If you are very close to retirement then you may have reason to be concerned. However, if you are still several years from needing to tap the 401K or the IRA, then things aren’t as bad as they may seem. Rabbi Daniel Lapin, in his book Thou Shalt Prosper, talks about the differences in a snapshot in time and a video. The snapshot never really tells the complete story. That is never more true than in a Bear market or a recession. Austin Pryor of Sound Mind Investing has a great article titled In Search of A Silver Lining. In this article Austin looks at the last 14 recessions and the condition of the market 18 months from the midpoint of the recession. Here is the data in a table format that will help you understand the ‘silver lining’ in the Bear Market trends.

If you are in need of a little ‘pick me up’ because of the roller coaster ride, read the whole article and forget about today’s snapshot and look at the video of the American economy.