What does your personal 401(k) and Federal Criminal Defense Investigation have in common? In a word: nothing. However, I know most readers out there have 401(k), 403(b), 457, Roth IRA's, ect. and I want to add some comments about the current financial debacle unfolding before us. From The Atlantic (a personal favorite):
"Don't look. Seriously, don't look. I have no idea what's going on with any of my equity investments, because that is not short term money that I need to keep my eye on.
If you look you will get upset, and you will be tempted to do something stupid. I can't guarantee that the market won't drop further and you won't regret having held on. But as a general rule, selling into a massive liquidity crisis is a pretty bad idea. Selling in a panic because your assets just dropped 30% is almost certainly a bad idea.
The good news is that while the stock market can take a long time to recover, it historically doesn't actually go down for more than a couple of years.
Yeah, that's not very good news. But unless you're planning to retire right now, my advice remains the same: don't look."
"Amid the uncertainty of the global financial crisis a pattern has emerged. First, the world’s central bankers and finance ministers construct bail-outs and rescue packages for teetering financial institutions. Then investors give their manoeuvres an emphatic thumbs-down. The pattern is becoming ever more pronounced.
In Europe, an unseemly mishmash of bank rescues and a scramble across the continent to beef-up national deposit-protection schemes have done nothing to solve the paralysis in money markets. Stockmarkets steadied themselves a little, early on Tuesday October 7th, after a series of dramatic falls on Monday. But the overnight dollar London interbank offered rate (LIBOR), the rate that banks are charged for borrowing from each other and other investors, climbed by a heart-stopping 157 basis points to 3.94%."
Or we can simply take the advice of King Solomon's advisor: This too shall pass.
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