Day 2: Don’t look at the market today (3/30)
I’m sorry.
My guess is that one of the following just happened: 1.) you said, “too late” 2.) you already opened another IE window to see how the market is doing and will be upset shortly or 3.) you decided to eat in tonight if either 1.) or 2.) happened.
It is an interesting phenomenon we are currently experiencing. The market is up, the market is down, we are in a recession, we are near a recession, it is almost a depression. You try to look at different industries to use as a measuring stick… can you believe companies that survived the Great Depression are folding? Companies that survived the Internet bubble burst are shutting down? Different times with similar outcomes—in different industries. This is uncharted territory for some.
You didn’t see as many newspapers closing in the ’30s because there was no CNN.com or Yahoo! News. The world was not at our finger tips. You didn’t know the market dropped until the next day—while reading the paper.
The auto industry was just budding at the time of the Great Depression. 80 years later, we see one of the mainstays in our economy get tested. 80 years ago, the President would be praising the auto industry for their advances in transportation. Now he has to figure out how to save a multi-billion dollar piece of the economic pie from total disaster. Not to say that anyone is right or wrong here (not for me to decide although maybe I will weigh in shortly), but we need to look at what is happening. Each economic downturn will affect different groups.
As referenced earlier, the recession-like economy of the 2001 Internet bubble hurt tech companies and everyone on the bandwagon. The recession of the early 80’s hurt many tied to S&Ls. The current recession (yep, I said it and agree) has many factors including the Sub-Prime crisis affecting EVERYONE. You may not have a sub-prime mortgage but your bank probably gave some out. What I am trying to get at is that we cannot necessarily use past events to make comparisons. 25% (roughly 30 million people) jobless rate during the Great Depression, near 10% (roughly 26 million people) right now allows us to see the scary similarities. But each time period has its own unique causes, concerns, and ultimately (and hopefully for this one) successful conclusion. Some say we are (or were) near a depression. Others, as mentioned earlier, think maybe it is a recession or that we are pulling out of the recession. Regardless, we need to work with the hand dealt. It is easy to succeed in times of great prosperity. It is one of life’s greatest challenges to succeed in the face of failure and even more difficult when it is failure we have never seen before.
But we must keep this in mind… we are in a time of instant gratification, constantly seeking the next high or saying the newest low is the worst in “x” amount of years. Everything is an extreme. I can’t remember the last time the market was up or down fewer than 100 points in consecutive days.
Here is what you need to do:
Step 1: Breathe. If you did this, you are alive. Whew…
Step 2: Look at yourself in the mirror. You were able to afford clothes.
Step 3: Call your loved ones. You have a phone… and a family.
Step 4: Breathe again. (hopefully you have still be doing this during steps 2 and 3).
I am not saying the current economic situation doesn’t suck. It does. What I am saying is that we can now begin to reexamine our lives. Experts believe we may be on the upswing. I don’t even want to say it but I will; we cannot get back all that was lost over the last 18-24 months instantly. But hopefully we all still have something to continue to strive for.
The 4 steps above can be done when the market is up and the market is down. I won’t actually offer any financial advice as that is not my area of expertise, but I thought it would be good to look at the bigger picture.
Ever think you would read something about the economy and the only numbers in it are the numbers listed in the steps?
So while you get pissed at me while reading this and think I don’t really have a right to say everything will be okay, why not open up a bottle of wine? Here are two that would be good choices:
Red: Rancho Zabaco Heritage Vines Zinfandel; fruity, spicy, deep flavors. Incredible with a great steak or burger.
White: Pierre Sparr Riesling — very dry, French Riesling. Goes great with salty snack foods.
No need to tell me if you like my main blog, just let me know what you think of the wines.
