Business As Usual, Vol. 2: "When it all, it all falls down..."

(This video has nothing to do with this blog except for the title. Still a cool video tho.)

For those of you that know me, you may know that I work for 3 financial advisors, so I have all these financial news in front of my face everyday. Anyways, I'm at work watching the sky fall, again. Week after week, the financial news gets worse. Today, there was another big sell off in the global markets for fear that the bailout plan won't quickly unfreeze the credit markets and European and Asian governments are scrambling to hold up their own banks. This time the Dow Jones (the most followed stock market index) was down as much as 800 points before they pared back losses and ended the day down 370 points or another 3.6%. The Dow finished at 9,955, which is below 10,000 for first time since 2004.

Most people in their twenties don't seem to be too concerned about the market because they aren't heavily invested yet. However, most of our parents that are near retirement or are retired are getting hammered by the economy as their retirement investments are rapidly evaporating and I'm talking about thousands of dollars on these bad days and possibly tens of thousands over the past few weeks. So if your parents seem to be trippin out lately because of what they've been reading in the news, that's why.

So how does this hurt the younger demographic? Credit and jobs. The automotive and housing industries are taking massive hits largely because loans are getting more difficult for consumers to get. I mean, how are you going to get a loan when these banks won't even lend other banks money overnight... and supposedly they got money in the bank (shawty what you drank). Also, companies and local governments are struggling which is why unemployment is very high and increasing. Good news for my nurses out there though, the health care industry is one of the few industries thats still adding jobs.

Although our parents may not be able to risk their retirement money in this volatile market, this may actually be the best time to start investing if you're young and have extra cash. And I'm not talking about dumping all your savings all at once or making bets in the stock market but I'm talking about using dollar cost averaging (definition) to take advantage of the "30-50% off sales". Use a range of mutual funds or ETFs and diversify across different asset classes (stocks, bonds, commodities, and REITS) and invest for the long-term (20-30+ years). Just remember that when it all falls down, you get to buy it at a cheaper price. But then again, none of this matters if you don't have money to invest in in the first place.

Whatever your situation may be, stay informed, but don't get sucked into all the media hype. Just stay focused and work hard for yourself and for those you care about. Sorry if this was too long.

Peace,

C M C

Yahoo - Wall Street tumbles amid global sell-off