It is one way traffic: Dow Jones plunged below 8000, a first since 2003. There was a bear rally on Tuesday but it is a folly to be tempted by profits in all these technical rebounds.
For those who are drawn in and end up selling in a panic, you risk doubling your losses. You are doing just fine having the bulk of your money in the bank. If you want to go long (very long), then just nibble at the stocks.
Regardless of the crumbling US financial system, the end of Detroit’s Big Three, or even a recession degenerating into a depression, let’s stay calm. Go for a walk outside and inhale some fresh air. Tracking all the grim economic indicators and staring at our dwindling portfolio will not do our psyche any good.
I doubt anything concrete will be done until after the inauguration when Obama puts his economic rescue plan into action. He has committed to doing whatever it takes to rescue the economy and by that, I hope he has prepared a substantial fiscal stimulus package.
There will be a whole lot of characters eying the bailout package and hoping to get money into their coffers. It is not easy to be Santa Claus, either way, Obama will be lambasted for rescuing one party over another. Will be interesting to see how the action pans out later, stay tuned.