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Tuesday, October 14, 2008

What Should You Do With Your Money Now?

The most common questions running on everyone's head now would be:
  • where to stash my cash?
  • is it a good time to invest now?
  • should I sell off my investments (stocks, mutual funds, etc) and keep liquid cash?
So, wanting eagerly to dig out the information from my head for the benefit of mankind (ha ha ha), I started this post. However, as I continued with my research, I found that there were already some very good analysis done on this topic and posted on the net by some very experienced finance guys/gals or just let's call them financial gurus. Cancelling of my earlier idea, I decided to let you all to have a go on their opinion instead.

James B. Stewart has written piece recently on this matter in smartmoney under the title : Crashes, Like Bubbles, Call for a Level Head

I liked what he said: -

"I didn't need to waste much time thinking about what to buy. Everything was beaten down. There didn't seem to be any point in stock-picking. As I've said before, at a time like this what you buy is less important than that you buy something."

" the predominant emotion, which is fear in a panic, greed in a bubble. Psychologists tell us fear is a more powerful emotion than greed."

He's also written another excellent article, For Long-Term Investors, Now Is Time to Buy. This simple title by itself should tell us what we should do now in terms of investments.

We can also make use of one of his valuable tips in investment as I found below:

"....I follow a disciplined system of buying on 10% declines in the Nasdaq, and selling at intervals of 25% gains. These are based on historical averages for corrections (an average 20% decline) and bull markets (an average 50% gain.) The goal is simple: Buy lower and sell higher."

The Silicon Valley Blogger in her latest update has poured out her opinion, even though that is not the main topic of the day:

"...that it would be a total waste of a bear market if we ever miss the chance to dollar cost average even just a teensy bit into it. If we’ve got money to spare, it’s going into our core index funds."

For a more comprehensive read, she has also given ideas on Best Places To Put Your Money When The Stock Market Tanks.

Over a cup of tea with a friend, a question popped out. "If the average person is selling, then who’s buying?" As I was searching for an answer, I stumbled upon a very good article by J.D at getrichslowly. I was quite surprised to find the exact words that we used were actually in his article! Maybe then, it is possible that we were not the only ones discussing about this topic now.

At the end of the day, after listening to the experts, you decide yourself what do you want to do with your money. It is your money after all.


The Digerati Life said...

I appreciate the mention! Thanks so much!

t-luck said...

You are most welcome! :) Hopefully more people can learn and educate themselves in this matter.