More Strategies on Weathering the Economic Storm

We have seen lots more volatility this week in the stock market. Bad news keeps getting badder, like the loss of over $1 million jobs this year and General Motors burning through billions of dollars worth of cash in the last quarter alone. These are staggering numbers. What do they have to do with you and me? In the short term--everything as we continue to watch our 401ks become 101ks but as long term investors, we can weather the storm. Here are some strategies that you have probably heard before but we all need continued reassurances:

1) Stick to your plan.

• Young people--keep on funding your Roths and make sure you have emergency savings
• Pre-Retirees--keep on saving in to your retirement plans--your dollar cost averaging is a big plus right now
• Retirees--watch your spending --you might have to tighten the belt for a few years

2) Stick to simple investing

• Low cost mutual stock and bond funds
• Don't try to figure out the next hot sector or the sector that you think is poised for significant growth
• And for goodness sake, don't think you know when to get out of the market and when to get back in. Remember that upward surge of 900 points the end of October???

3) Rebalancing

• Rebalancing your portfolio at least annually provides smoother returns and guarantees that you are selling high and buying low
• Harvest those tax losses now--great opportunity to rebalance taxable accounts and capture the losses (can always be carried forward if not used this tax year) and rebalance your portfolio at the same time

4) Turning off the "white noise"

There are some total idiots on the major news channels who just love to spout off and create sensational stories. Boring! Turn them off!

Call or email me anytime with any issues. Have a great weekend.