Dow Plummets
The
DOW took a dump today of almost 400 points. Oil was up more than $11
before settling at just under $140/barrel. If you have a 401(k) or an
IRA, I suggest you make sure you know where your money is invested. If
you have been smart and already made sure your investments are placed
in "safe" and diversified investments, then I suggest you just don't
look at all!
Recent headlines have been concentrated on how much the market has
dropped over the last several months. Some places dropping double
digits. Many think a 30% drop in housing is the worst that could
happen. I submit that a 30% drop in housing was needed and not nearly
as bad as it sounds.
The DOW dropped 3.13% in one day. On the surface, 3.13% doesn't sound
that bad. When you annualize it, the figure becomes a bit more
daunting. A 3.13% drop in one day annualized is approximately
48,482%. I am rounding, but I think my rounding error can be forgiven.
Just don't look at your portfolio and you will be ok. If this drop had
occurred over 5 days, it wouldn't sound nearly as bad. It is only
about 8.5%. Unless you need your money today or in the next 10 years,
you should be fine. If you plan on retiring in the next 10 years you
should already have determined your retirement strategy and how you are
going to preserve what capital you have left for retirement. Working
part-time to pay the bills doesn't qualify as retirement.