Thursday, October 9, 2008

Thoughts on the economic meltdown


From hearing the word on the street, I get the impression that everyone is going to bail out of stocks soon who is still in. That is only a wise idea if you need the money to live offi n the very near term. Otherwise, withdrawing the stocks locks in losses, since the stock price is only set when you sell and buy, so right now it has no value until you cash it in. Also, moving to cash right now is also a losing proposition since the interest rates at banks are in the mid fours, meaning you get a negative rate of return on cash accounts. Government CDs are also negative return gainers, so rather than fret over immediate investment I would rather see people save some money and use some of it that they can spare to buy things before the post bailout0bearstearns-aig-stimulus payment borrowing starts to really kick up the inflationary dust storm. I feel confidernt having invested in the growing wheelbarrow market. It is the next big thing in banking.

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