NYTimes: Don’t Panic
I personally like the Hitchhikers Guide to the Galaxy, and right now it’s good advice. The NYTimes actually titles the article Time to Assess Finances, but they really mean “don’t panic”. The basic advice is sit tight, don’t make any emotional decisions, don’t sell stocks you meant to hold long term while they’re down.
“Small investors always make the worst timing decisions because emotion is involved,” Mr. Tysk said. “This is precisely the wrong time to move to safer options. The stock market has dropped dramatically and now is the time to invest — don’t close the stable door after the horse has left.”
They do talk about TIPS, which is something I hadn’t seen much of in the press until very recently. They’re a good choice for folks who need stable money, such as folks past retirement who have a significant chunk of their portfolio in bonds but need to worry about inflation as well.
Treasury Inflation Protected Securities, known as TIPS, are securities whose principal is tied to the Consumer Price Index.
With inflation, the principal increases, while with deflation, it decreases. When the security matures, the United States Treasury pays the original or adjusted principal, whichever is greater.
The one thing they just gloss over is job security. It would probably be a stronger article if they left it out entirely, here is everything about your job:
The first thing to do is take stock of your life. Determine how secure your job is, which, in these uncertain times, may not be easy.
If your job is relatively safe, step back and look at your financial situation.
And if your job isn’t safe? That advice must be in a different article, because it’s not in this one.