Tuesday, March 11, 2008

Not Choosing Individual Stocks in This Market?

For some time now, I noticed that I haven't been blogging about individual stocks. The market has been bad, and I didn't think the time was right to start going for stock home runs.

Then yesterday, on the CNBC show Mad Money, Jim Cramer says something very similar, that he is not recommending many stocks in this market because the market is very bad.

Thank you Jim Cramer for echoing my thoughts exactly.

There is a common market saying that a rising tide lifts all boats. The same thing can be said about the opposite of that saying.

Some reminders:
  1. Your 401k money is long term money (assuming you have many years or decades before you have to take money out.) If you have a diversified set of broad based ETFs or mutual funds, you can ride out this market. Continue to put money in your 401k and continue to accumulate.
  2. In your discretionary fund, are you taking too much risk?
  3. Do you have high interest rate consumer or credit card debt? Consider paying it off.
  4. Do you have a 3-6 month emergency cash fund in conservative investments?
  5. If you think there is a housing bottom within five years, and you intend to buy a house with money from your discretionary portfolio, then maybe you can take some money out and put the money in more conservative investments (high yielding online savings account, for example.)
  6. Don't forget about controlling your losses.

I intend to create a new blog entry commenting on today's monster rally in the US Stock Market.

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