Tuesday, September 30, 2008

I am young, and I’m buying stocks on sale

A 777 point loss in Dow yesterday is enough to make anyone hyperventilate; especially since this is the first real financial downturn I’ve seen as an adult!

However, it’s times like these when the big picture- the ugly whole reality of the stock market crashing down- is so overwhelmingly scary that it is best not to fixate on the whole picture. Instead, focus on yourself and your own personal financial picture. This is how I’m coping.

So, here is a list of financial things I can control:

1. I can stop unnecessary spending.

2. I can shop around for purchases I need to make in order to get the best deal (like on car insurance).

3. I can rest knowing that all my cash is FDIC insured, because I have checked my accounts on the FDIC website (you can too, go here).

4. I can keep my short term dreams safely financed by having the money in extremely low risk accounts like CDs and high-yield savings accounts (Go ING!).

5. I can understand where my money has gone in the past, and where my cash needs to go in the future because I map my finances through Mint.

6. I can get a 7% return (without any risk!) by paying off my student loan.

7. I can curl up with a book about the history of Wall Street (currently reading: A Random Walk Down Wall Street) and have the intellectual reassurance that bear markets happen routinely and that they routinely bounce back.

Together these things keep me grounded and keep me from making rash decisions concerning my stock portfolio. It may do little to dampen the emotional distress of seeing my retirement portfolio dip 20%, but it can keep me muttering: I am young, and I’m buying stocks on sale (and I love a sale!). I am young, and I’m buying stocks on sale. I am young, and I’m buying stocks on sale. I am young…


Moneymonk said...

This is the best time to buy stocks. I keep telling people and they just don't understand

Wendy said...

Very smart move!

Retired Syd said...

I agree. I've been sitting on a little cash and I just started investing it today. My plan is 1/4 of it each week for the next 4 weeks no matter what happens. I know 20 years from now I'll be glad I did.