It’s not easy to sit back and watch the Dow drop triple digits in one session.
Feeling panicky? Before making any hasty moves, here are five steps to consider first.
Don't Panic
First and foremost: Stay calm. The worst thing an investor can do is panic and go on a massive selling spree, says Ben Tobias, a Plantation, Fla.-based fee-only certified financial planner. Investors who sell now will turn paper losses into real losses and won't have money invested to recoup those losses when the market rebounds, he says.
And make no bones about it – the broader markets will recover. History has shown that over the long haul the stock market goes up, not down. Indeed, the periods after a crisis are often very robust.
Make Sure You’re Covered
If headlines of bank failures have you eyeing your mattress as your safe haven, take some deep breaths. Chances are the money you have held at your bank is FDIC-insured. If so, even if the bank shuts down, up to $250,000 (per depositor) in a checking or savings account (or $250,000 in retirement accounts such as IRAs or Keoghs) will be covered by the government. (To find out if a bank is FDIC-insured, visit the FDIC web site.) Those who have more than $250,000 in deposits should consider spreading it among several accounts at different FDIC-insured banks. That way, all of your holdings will be covered.
And what about the money you have at your brokerage firm
? In most cases, investors' assets at brokerage firms are safe even if the firm files for bankruptcy or shuts down. All brokerage firms that conduct business in the U.S. are required to be members of the Securities Investor Protection Corporation (SIPC), which insures accounts up to $500,000, including cash of up to $100,000 held in brokerage accounts, according to the Financial Industry Regulatory Authority (FINRA).
In some cases, when a firm runs into trouble, you still may be able to trade or transfer your account – as is the case with Lehman Brothers. Thus far, it hasn’t been necessary for the SIPC to step in. For more, click here.
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11/25/2008
5 Tips: Navigating Today's Troubled Markets
11/21/2008
Dow Plummets Again
U.S. stocks slid and the Standard & Poor's 500 Index plunged to its lowest level in 11 years after economic reports depicted a deepening recession and lawmakers postponed a vote on a plan to salvage the auto industry.
The Standard & Poor's 500 Index extended its 2008 tumble to 49 percent, poised for the worst annual decline in its 80-year history. Chesapeake Energy Corp. and National-Oilwell Varco Inc. slid more than 21 percent as crude sank to a three-year low as the economic slump crushes demand. JPMorgan Chase & Co. tumbled 18 percent and Citigroup Inc. plunged 26 percent as concern the recession will trigger more bankruptcies pushed the cost of insurance against corporate defaults to an all-time high.
``It's an ugly mess out there,'' said Randy Bateman, who oversees $15 billion as chief investment officer of the asset management unit of Huntington Bancshares Inc. in Columbus, Ohio. ``The economy is confirming it is very, very weak.''
The S&P 500 slid 6.7 percent to 752.58, under the low of 776.76 reached during the bear market in 2002. The Dow Jones Industrial Average sank 443.8 points, or 5.6 percent, to 7,553.48. The Nasdaq Composite decreased 5 percent to 1,317.05. Twelve stocks retreated for each that rose on the New York Stock Exchange.
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This Is America: Thursday's Show
Tonight on the November 20 edition on This Is America, with Jon Elliott...
Tonight world-renowned photographer Sebastian Copeland joins Jon to talk about his just released book Antartica: A Call To Action
This is Sebastian's second photographic book on Antarctica and will be a great Christmas gift for all who cherish our planet.
Also regular guest Shannyn Moore joins Jon live from Anchorage and one of Talk Radio News' great journalists tells our listeners the latest in Capitol Hill goings on.
And of course Jon will be taking your calls at 866-303-2270. So make sure to tune in to tonight's jam packed edition of This Is America with Jon Elliott.
You may also dial in and hear the show through Cellecast at 206-400-2860.
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11/07/2008
Videos: Across the Nation Celebration
How is it possible that an election could trigger so much joy? Are there so many political junkies in this country? We're thinking no. What then? Well, there's a bit of "Ding Dong W's Dead" going on. But the rest? Pure phenom.
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Maron v Seder: Is Africa a Country?
Sam Seder and Marc Maron hit the streets to conduct a reality check after the most recent Sarah Palin revelations, and find that most people seem to know a thing or two about continents and stuff.
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