Like many of my friends, I worry
and stress about the market and the quick descent of my IRA and stock
investments.
So I decided to go fishing.
A trip up Poudre Canyon, over Cameron
Pass and into the high peaks backdrop of Colorado’s vast North Park, where we
fished the winding North Platte River, was truly uplifting. My fishing buddies
intentionally kept the radio off, and our cabin’s TV, thankfully, didn’t work.
I didn’t buy the morning newspaper outside the Moosecreek Café in Walden.
I’m not sure if it was the fall
colors, the sunsets behind the Continental Divide or that one really fat,
three-pound rainbow jumping on the end of my line, but when I got home, the
daily news of the plummeting Dow didn’t faze me as much. At least not for about
24 hours.
Panic, one stock adviser said, is
not an investment strategy. Wading down a private stretch of river,
concentrating intently for the strike on your fly or just sitting on the bank
watching for a hatch calmed me down.
I came home with a positive
attitude. Then, the worst week in the history of the market got me thinking
again.
It’s so easy to say your investment
strategy is long term when the market is going up, not so simple when you keep
reading comparisons to the Great Depression. It’s easy to say I’ve been through
bear markets before, not so easy when trillion-dollar bank bailouts don’t stem
the bears much.
I
really want “sell now” screamers like Jim Cramer to be so dead wrong (wasn’t he
screaming buy on downturns?) Maybe sane people will just quit watching his
rants altogether.
So
I asked myself, if I really do believe that a Dow in the 8,000 or even 7,000
range will find a bottom, are there any signs justifying a little optimism?
So
here goes.
*
In just one day driving up and back from fishing, gas prices dropped 10 cents.
Going up, we filled up at $3.36, coming down, $3.26. I heard a Denver station
was selling $2.99 gas. Oil is under $70 a barrel.
*
I remind myself daily. If you haven’t sold, you haven’t lost a penny. Sure it’s
depressing to compare your investment values to the start of the year. But
gains have been erased on paper only. Will buyers jump back in, and the Dow
reverse direction? A 900 plus day was encouraging, only to be followed by more
selling.
* Do you know who your bank or
broker is anymore? Let’s see. J.P. Morgan Chase became the biggest bank by
deposits size by taking over Washington Mutual, seized by federal regulators.
Bank of America is creating the world’s largest brokerage by buying Merrill
Lynch. And Wells Fargo finally swallowed up Wachovia. Eventually, you, the
customer, will be in the driver’s seat. Mega-banks or small community banks
must have your business and deposits, which are now insured up to $250,000.
On Oct. 1, I started counting how
many pieces of financial marketing mail, including online pitches, I’d receive.
WaMu sent me a credit card offer on the day they were bought. Chase offered a
home equity loan. U.S. Bank pitched me a platinum business card. As of Oct. 15,
I received about 12 offers, almost one a day.
Bank junk mail does not mean you
get a loan. Even potential borrowers with high credit ratings are feeling the
squeeze. But when the smoke clears it’s going to be easier for your financial
shopping, keeping everything from a checking account to your retirement
investments under one banking umbrella.
* And what about businesses,
especially the small businessperson who might have been thinking of selling?.
One Colorado business broker I know admits it’s harder now to find buyers
unless they have cash. It is time, he said, for an owner to get serious about a
one or two-year plan to make their businesses attractive. With investors
hesitant about the stock market, they could have even more cash for
acquisitions in the near future.
* The Fed’s latest rate cut,
although seemingly ignored by the market, means home mortgage rates could drop,
auto loans should be cheaper, credit card rates should drop. A consumer
spending slowdown is inevitable, but steps like this will help many.
* I’ll end with a few tidy numbers.
$700 billion to buy U.S. banks’ mortgage debt. Another $250 billion to buy bank
equity. Sounds like a pile of dough, but in Europe, the bailout is up to $2.3
trillion. Something good needs to come out of this.
I wish I had more reassuring news.
Whatever you do, be wise about your moves. Consult your CPA or adviser before a
panic decision you’ll regret.
And if the weather stays warm,
consider going fishing.
Recent Comments