It’s going to be a bumpy ride
Stability possible despite fluctuations
With roiling financial markets spinning the heads of even the most savvy investors, what are the rest of us to do?
Here’s a look at what’s been happening in the economy, and what you should keep in mind as stock indexes bounce, government officials cut rates and pundits prognosticate about the future of our finances:
¢ No time for timing. Stock market investors should be in it for the long haul, about 10 to 15 years, said Barbara Roper, the director of investor protection at the Consumer Federation of America. Investors shouldn’t try to respond to every bit of market upheaval by “reshuffling” their portfolios. Then again, current market volatility presents a good time to do a financial checkup to see whether your portfolio is too risky or you have more invested than you can afford, Roper said.
¢ Diversify. Balancing investments in both domestic and international holdings, and with stocks and bonds, is the best way to “recession-proof” your portfolio, advises Ellen Rinaldi, principal and head of Vanguard’s Investment Counseling & Research group.
¢ Credit cards. Interest rates on many credit cards, and home-equity lines of credit, likely will fall in the coming weeks, thanks to the Fed’s actions, but how much depends on the issuer. Some cards have limits to how far declines can go.
¢ Home loans. The Fed’s rate-cutting often doesn’t directly affect mortgage rates. But people looking to refinance adjustable-rate mortgages generally are seeing better times – for ARMs based on one-year Treasury bills, the rate is about 5.25 percent now, compared with 7.5 percent last summer. Refinancings also can pay off, for folks with good credit and a home value that’s holding steady.
Recession
- Fund managers advise investors to stay the course (01-23-08)
- Answers to consumers’ questions (01-23-08)
- Fed rate cut stabilizes stocks (01-23-08)
- Asian markets on the rebound (01-23-08)
- Keylawmaker predicts stimulus package by March (01-21-08)
- Democrats, WhiteHouse debate over who should get tax rebates (01-20-08)
- Wikipedia.org:Recession