Comments (www.federalreserve.gov) related to the hundreds of billions of dollars that the Fed has already made available to the markets to help free up the flow of credit, including new auction facilities that you do not hear about in the news:
Chairman Ben S. Bernanke
At the National Association for Business Economics 50th Annual Meeting, Washington, D.C.
October 7, 2008
Current Economic and Financial Conditions
"...These are momentous steps, but they are being taken to address a problem of historic dimensions. In one respect, however, we are fortunate. We have learned from historical experience with severe financial crises that if government intervention comes only at a point at which many or most financial institutions are insolvent or nearly so, the costs of restoring the system are greatly increased. This is not the situation we face today. The Congress and the Administration chose to act at a moment of great stress, but one at which the great majority of financial institutions have sufficient capital and liquidity to return to their critical function of providing new credit for our economy. The steps being taken now to restore confidence in our institutions and markets will go far to resolving the current dislocations in the markets..."
Some will discount this as more lies from the government but if you read the details at the Federal Reserve site of the many innovative actions being taken you may come away with some encouragement. No one action will work to calm this fear in the markets but together they may help - eventually. To believe or not to believe?
If you leave the financial markets, and can achieve 3% per year in some less risky fixed income vehicles then it will take - at this point - more than 12 years to recoup your losses. That, however, does not consider the damaging effects of even mild inflation. Fixed income is no guarantee, nor is cash under the mattress. If the global financial system did completely collapse, then even cash would not be meaningful. I encourage you to make no investment changes purely out of the raw emotion of fear (or greed, in those distant good times).
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.