Why I’m Not Panicking – And You Shouldn’t, Either

Over the last three or four days, I’ve received a bunch of emails from readers asking me why I’m not talking breathlessly about the chaos at Freddie Mac, Fannie Mae, and IndyMac. I’ve read dozens of long explanations of why this is disastrous and why it’s the worst thing people have ever seen, and I’ve read many, many people shouting that they should completely get out of all investments right now and put their cash in a little green box buried in their back yard (or some similar crazy scheme).

Here’s my take: I think there’s almost nothing to worry about, and if you’re actively selling any broad investments right now, you’re actually making a giant mistake.

Five Reasons You Should Not Be Panicking

1. Panics happen every few years

Right now, we’re having panics in the banking and housing sectors. A few years ago, corporate accounting was destroying everything. Remember the tech sector collapse of half a decade ago? The savings and loan failures before that?

These booms and busts happen for one reason and one reason alone: most investors are sheep. They follow whatever has been hot lately, and they run away whenever there’s a bad sign. These processes are rarely rational – in the 1630s, people bet their entire life fortunes on tulips.

It took only a glance at housing prices over the last decade or so to see that there was a big bubble going on. This bubble turned out to be mixed in with the banking industry which was funding this bubble. Now we’re seeing that bubble collapse. In a few years, when all of those ARMs adjust, people will be running around yelling “PANIC” about some other sector.

2. The talking heads shouting “PANIC!” make money from “PANIC!”

If you run out right now and sell your stock, guess who makes money? That’s right, brokers and fund managers. These people want churn. They want you to buy and sell so they can make profit on the buying and the selling. The people who are on CNBC and TheStreet.com shouting “PANIC!”

If I was a broker or an investment manager and I knew that if I shouted “PANIC!” I could make myself a mint, I’d be tempted to shout “PANIC!” I probably wouldn’t do that because it would actually not help my clients, but there are other philosophies out there. Some believe that alerting their clients to “PANIC!” can help them avoid losses. Others could actually care less about the clients and just want to profit.

There’s big money to be made in “PANIC!”

3. Stocks are not short term investments

Unless you’re day trading (and thus making an effective career out of very short term movements), stock investments should never be short term investments. The stock market is extremely volatile over the short term – annual losses of 20% or more in stock investments are somewhat regular occurrences.

So why invest in stocks? Over the long run, the gains exceed the losses over the stock market as a whole. Here’s a quote from David Swenson, the author of the excellent book Unconventional Success:

To the extent that history provides a guide, the long-term returns for stocks encourage investors to own stocks. Jeremy Siegel’s two hundred years of data show U.S. stocks earning 8.3 percent per annum, while Roger Ibbotson’s seventy-eight years of data show stocks earning 10.4 percent per annum. No other asset class possesses such an impressive record of long-term performance.

The stock market returns very well on average. The only problem is that it’s an average of some very nice positive numbers and some very painful negative numbers – that’s the nature of an open market.

Why should one believe the stock market is going to go up in value? THIS IS THE END! Stocks will continue to go up in value over the long term for one simple reason: worker productivity. Companies over time will earn more money per employee because each employee is able to produce more value. As long as humans are innovative creatures, coming up with new technologies and ideas, then companies that implement those ideas will increase in value.

4. Down markets are never a time to sell

At some point, the stock market will return to its previous level – there has never been a twenty year period of loss in the overall stock market.

Since the stock market is down this year, and we believe that the stock market will eventually match the previous high, now is not the time to sell. Now is the time to buy.

Let’s look at it visually using the S&P 500 from about 2000 to about 2007:

Google Finance chart of the S&P 500

Obviously, it’s great to sell at the top – you’ll make a killing. The problem is that one never knows exactly where the top is. The market will start to drift downward and many people will think it a normal fluctuation. After a while, the talking heads on CNBC and other financial papers will begin to notice that it’s going downward and start shouting “BEAR! BEAR!” to get people to “SELL! SELL!” so they can make a profit on transaction costs. Most people still don’t move right away – it takes a little while for the “panic” to build.

Eventually (as marked above), it becomes conventional wisdom that things are disastrous – that’s where we’re at now, well into the down trend. Now, if we believe that at some point in the future things will eventually return to their original level and we can clearly see that things are way down from their original level … why would you sell? Instead, it looks like a time to buy to me.

5. If this event is making you worried about losing everything, then you’re not appropriately diversified

My last point is for those people who have a ton of money in the damaged sectors right now. If you’re afraid that you’re going to be losing “everything” in this down situation, then the problem isn’t the stock market. It’s your investment strategy.

Diversification is what saves you from a bubble blowing up in a particular sector. Many advisors suggest having 5% of your total assets or less in any one sector simply to a void this. That way, even if one sector loses everything, you lose at most 5% of your money – a 20% drop in one sector means only an overall 1% loss for you.

In other words, don’t put all of your eggs in one basket and you won’t panic quite so much when a basket falls to the floor.

Throughout all of this tumult, I’ve lost a fair amount of money in my retirement account. Right now, I’m contributing significantly more money per week than I was three months ago. And I feel fine. I hope you do, too.

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  1. Rick says:

    While I mostly agree with you, one also has to look at the fundamentals. And in this case, I’m not so sure that the fundamentals are there for the U.S. economy.

    Buy and hold is not always the best idea. For instance, I once purchased a financial stock at $12. Within a few months, the stock dropped to $6. I lost 50% of my investment. Should I sell, or should I purchase more? Listening to advice such as this would suggest that I purchase more at a discount. I ended up selling, and that was a good thing. The fundamentals weren’t there, and the company eventually went bankrupt. The stock is now trading for a few cents a share.

    I mention this because many would suggest that the U.S. economy as a whole is bankrupt. The fundamentals just aren’t there anymore. If any of you have read Warren Buffet’s famous speech Squanderville vs. Thriftville, you’ll recognize this. Every day it seems, one reads another article about how foreign governments and sovereign wealth funds are buying more and more of our country. Now a Belgian company owns the company that makes the beer many of us drink.

    Our country is essentially bankrupt. We have such an enormous debt, and an inability to pay it off. We have, in the past, financed this debt with our strong dollar. However, the world is already moving away from using the USD as the world’s reserve currency. This change is likely permanent.

    Our economy is very highly dependent upon oil, most of which we import from foreign countries. That is, we basic livelihood depends on good relationships with these foreign nations, or a forced diplomacy, in the case of Iraq. If we cannot maintain these foreign relationships, our economy will die quicker than you can say “Obama will save the world.”

    Our housing market will soon recover, and with it, the credit market. But one has to question whether the fundamentals in our country’s economy support the continued growth we have had in the past. We can’t pay our debts. We have a looming Social Security crisis. We spend trillions of dollars on war. And despite what some people say, I don’t believe that this will change, even if Obama is elected. If our country was a regular company, and followed the same accounting principles, we would have long been considered insolvent, bankrupt.

    I’m not worried. I’m not panicking. But I also believe that if you depend upon your S&P500 index fund to support you in retirement, you will be sadly mistaken. Personally, I just take each day in stride, while keeping an eye out for the future. I don’t know what the future has in store, and as with anything, no one can predict the future. But I just don’t believe that the U.S. economy has the fundamentals appropriate for continued growth.

  2. I’m not panicking, in fact, I’m salavating over the potential deals that will available over the next year or so.

    Everything from used vehicles, to prime waterfront properties are deeply discounted!

    But you are absolutely right about diversification! While my REIT’s are not doing so well, my oil stocks are though the roof!

  3. Adam says:

    Trent: I love your take on this. I wish the mainstream media had the guts to say this on the evening news. So many people just believe everything on TV and then look what happens, people do panic and we have a volatile market. When people panic I am calm, and when people are calm, that is when I start to panic. Look at the late 90′s!

  4. Peter says:

    You forgot to put the little arrow on your graph in between 2002-2003 where it says “BUY BUY BUY BUY !!!!@!@@##”

  5. Matt says:

    This is a good overview of the correct mindset for a long term investor. It is important to stay the course in bad times, and your portfolio asset allocation should be at a risk level that allows you to stay the course.

  6. Jeffrey says:

    Watch out for people pumping commodities as the safe place for your money right now. Commodities historically fall during recessions. I’m selling my gold ETF shares shortly on the run up and looking to short the market for a while personally.

    While it is generally silly to panic, the only stocks I currently own pay out double digit dividends. My other money is diversified in foreign bonds and hard currency funds…also paying dividends.

    Long term, the dollar is going down.
    http://www.mises.org

  7. Caroline says:

    Thank you for writing this post. I’ve been meaning to write a similar post myself. I am not panicking either. What I am is frustrated at the media-induced zombies walking around in a state of paranoia. Grrr!
    Great post and so true.

  8. HIB says:

    Personally, as I see more and more articles that people should get out of the market and such, I see it as a buying opportunity. For instance, people are down on the real estate market right now which to me means I should be buying. When people are touting something as “the area to invest” you’ve already missed the boat.
    That’s my 2 cents!

  9. Charlie says:

    Excellent article! I work in the financial industry and sadly am watching many people lose it all but it was from greed – the greed from individuals who want homes they can’t afford so they get a sub-prime loan, and then lose it. Greed from the lenders who lend sub-prime loans and then have borrowers foreclose. It is so sad for everyone. You are correct, if you invest wisely and don’t get greedy you most certainly will be fine. Thanks for a very good article. One last comment, there is a sector of the population that has it harder and that is those close to retirement, even if they invested conservatively some of them are seeing a downturn in the money that they need to dig into.

  10. Erin says:

    Ditto what you and the other posters have said! Buy, don’t sell! (Or at least don’t sell.)

  11. KellyB says:

    I agree about the not panicking overall (although it’s hard not to!), but I have a question. I am well diversified, but with accounts through Ameriprise. I’ve been thinking I should move some of my accounts to Vanguard so I don’t pay the commission fees at Ameriprise. Should I do that now? I was thinking of going to what you have – Total Market Index and Total Int’l Stock index.

  12. RMR says:

    I can’t afford to be worried…I was moving along really well with almost $2,000 in my emergence fund then wham…that’s all gone between central AC repairs and auto repairs.

    On top of all that it costs me 4x for gas what it did a year ago….might as well just get used to debt….lord knows I have tried.

  13. Trent says:

    KellyB: I admit to being a huge Vanguard fanboy. Yes, I think you should move and put your money directly with Vanguard. You can invest fee free (if you get electronic statements AND if you have the minimums you need to invest – $3K per fund). They’ve treated me very well over the last few years.

  14. Buffalo says:

    I think the graph emphasizes that stocks and mutual funds should be a long term investment, that is > 10 years. If you need your money in next seven years, the market can be a gamble.

  15. Kevin says:

    The required, yet frequently forgotten mantra:

    Buy low, sell high!

    It really is that simple.

  16. IMHO if you have significant stake (job, investments, house, spouse, children, etc.) in America you should panic. The future of humanity is in China and India. I have been to both. China has the most dedicated workers on the planet. They only get 10 days off per year, and can only have ONE child, they do not center their lives about holding their infant children etc. All they care about is work & money. This is much better for the economy than emotionally subjective bullshit. India similarly so (but to a lesser degree). I have humongous faith in the future of humanity, but very little faith in Americans (nothing but fat people who spend too much on houses & gasoline), and even less in Europe/Japan/Korea (nothing but Supersized old, American-wannabe people IMHO)

    If you have a job which can be outsourced to China or India (or Vietnam, Brazil, Russia, Singapore, etc.) you should be very concerned.

    IMHO …

  17. appfunds says:

    Everybody should learn to cut losses and let her/his profits run.

    Mutual funds are slower than individual stocks but the rules are the same.

    If you lose 50 %, you need 100 % to be back at the same level.

    It doesn`t mean you should spend the money you withdraw from stock market. They just could wait in safer places for a while and then come back gradually.

  18. Mark says:

    There are some seriuos analytics out there (many in fact) who clame that this crisis is the worst since the 1930s and that it’s not only “another panic” but a serious anomaly in the roots of the capitalistic system.

    This might be hard for you to comprehend, but it was hard to comprehend for us (that live in the former Eastern block) that communism/socialism crumbled as fast as it did as well.

    So you might want to open your eyes to larger realities and timeframes of history no just 100 years of the stock market. The fact is systems change, societies rise and fall, countries are born and die… who is saying we’re not living at the end of one type of system and at the dawn of another one? Who is saying there are not some serious structural changes ahead for us? Holding stocks in the basis of 100 or 200 years of historic analysis and the guessing the future stock movement on that analysis is… well some serious simplification don’t you think?

  19. Robert says:

    Frugal Bachelor: While I agree that China and India represent some better potential returns than the US, I would like to point out that your reasoning is a bit off. China’s 1 child policy exists not to encourage productivity, but as a draconian (and EXTREMELY unpopular) method to try to reduce the population in the country with almost 1/6th of the world’s total population. The government has especially been under pressure about this policy after the recent earthquakes, since many families that do follow the 1 child policy (there are those that violate it and accept the punishment, the Chinese traditionally prefer huge families) lost their sole child in the disaster and may not be able to conceive another due to age or government-sanctioned surgical procedures to prevent additional children (tubal ligations, etc.)

    Also, you mentioned about jobs being outsourced, a hot-button topic to be sure. What you may not realise is due to the recent weakness of the US dollar and the high cost of transporting goods, the trend of job outsourcing is actually starting to be reversed in some cases. Manufacturers have actually started to bring their jobs back to the US, because the costs of transporting goods as well as the cost of labor in previously cheap countries have both significantly gone up. The fast-growing economies in China and India are leading to higher wage inflation, which is making them less attractive to companies looking for cheaper workers to fill minimal skill slots like 1st tier tech support. I’ve been hearing stories through the tech grapevine about companies starting to bring outsourced tech support call centers back to the US as well, simply because the savings they received moving the jobs to India (which unlike many other developing countries has a large English-speaking population) are evaporating now that Indian wages are being pressured up by India’s fast growing economy.

    Ultimately the world’s economy is very dynamic. While the “undeveloped” countries usually have a lot of cheap labor, as companies move in to take advantage of those savings they ultimately change the fundamentals of those economies, pushing up labor prices to a point where the savings diminish. Unfortunately the additional wages being paid in these countries is part of what is leading to the rapid increase in commodity prices (especially food and fuel/oil prices) that has been hurting us at the pump and the grocery checkouts.

    But these economic changes are also presenting opportunities to come up with new technologies (i.e. alternative fuels, increased recycling, improved crop yields, etc.) that also provide some great investing opportunities. And many of those investing opportunities are best in the more industrialized nations of Europe and North America, in part because those nations have the most available capital to fund the research needed.

    You don’t see China or India putting as much effort into research of alternatives to oil as you do Europe and the US, simply because much of their increasing wealth is being eaten up by the need for additional inrastructure and the consumer demands of a very large emerging middle class. That is not to say they are putting in no effort, but the developed nations are the leaders in areas like this for now.

  20. almost there says:

    I have hit the panic button in the past. In 84 when I bought my first mutual fund it went down and I sold at a loss and went to a MM. I did this with my IRA too, in 91 instead of letting it sit. I am finally getting it. I purchased VGENX at vanguard a month ago. It is down over 12 percent but I have no plans to do anything. I do not even check it on a regular basis. One thing I finally learned is that actual facts and reality has nothing to do with it. It is the perception people have that make the reality. The money men win all the time by even one share change in the market. Of course they trade blocks of half million to a million shares to make the money.

  21. M says:

    I agree let your money sit, over the last year I’ve lost 11% in my Defered Comp Retirement fund, I have 8+ years to go so I consider it “buying cheap”. I am still maxing it out every year because of the tax savings and I know the tide will turn, things will work themselves out and I will have quite a few shares more then if I’d stopped putting money in or if there hadn’t been a down turn in the market. BTW I still have made almost 10% over the life of my Retirement fund even with the huge loss this year so I’m not all that unhappy.
    This is not an employer matched fund.

  22. Debbie says:

    Excellent post! Personally, I think now is a great time to buy solid company’s stock.

  23. "Mo" Money says:

    This is a great post. Why do we want to buy everything on sale except the stock market? Have a good investment strategy in place and do not let your emotions change the strategy.

  24. SteveJ says:

    @Frugal Bachelor, @Robert,

    Have to side with Robert on this one, the weakening of the American dollar makes every other country’s growth look like inflation to us. With transportation costs skyrocketing, we’ll be fine individually in the outsourcing dillemma.

    An interesting twist that I haven’t made my mind up about is the impending retirement wave(Prediction of 20 million fewer American employees in the next 12 years). How will that effect America on the global stage? Sure we’ll all have jobs if we want them, but will we be able to sate global/domestic demand? Not without new tech. Will we go back to employees locking into one skillset for life?

    So don’t panic, but definitely keep your eyes open. I think in the shortterm, anything that’s moving overseas will come back home, but then we may find ourselves with more work than we have employees and it will fade back out.

  25. Josh says:

    Great post. Bear markets are the time to buy, bull markets are the time to sell.

  26. Susan says:

    Can those who have been efected by the IndyMac fiasco present a class-action law suit? If so, how can it be done? Where does one begin?

  27. Ryan McLean says:

    My mother is ALWAYS telling me not to invest into the stock market for less than 5 years. So I wouldn’t panic either (ok maybe just a little) but I think I would stick it out.
    When one person starts to panic so do others and it starts a chain reaction. By not panicing you can stop panic

  28. Concierge says:

    I wouldn’t panic. But it is important to know the fundamental changes that have occurred. The U.S. is a debtor nation. Now, when the rest of the world sneezes it will be the U.S. that catches pneumonia…we see references to U.S. financial institutions as “too Chinese to fail”…we need that money. I would be invested in large caps that are export oriented (domestic demand will be low for quite a while) and I would be invested in commodities (buy on the dips) and stay invested in emerging markets to take advantage of the continued decline in the dollar and their still good growth rates. Know where you are invested and why…if you don’t know why then you are setting yourself up for panic. Also, remember that as soon as you hear negative news it is already priced into the market…so there is little reason to react…again, know why you are invested. Best wishes!

  29. katy says:

    the crash of 29 didn’t recover till 54.

  30. Danny says:

    @Frugal Bachelor: “and even less in Europe/Japan/Korea (nothing but Supersized old, American-wannabe people IMHO)”

    Uh, talk about a generalization. Most people in those countries are not American-wannabes.

  31. Pete K says:

    Sorry, but I can’t agree with this post.

    IN FOR THE LONG HAUL – GO BROKE

    http://www.mutualfundmagic.com/articles/012808.html

    “Throughout all of this tumult, I’ve lost a fair amount of money in my retirement account.”

    In any investment, the most important decision you need to make is not “when to buy” but rather “when to sell”. You need to know in advance what your sell “signal” will be.

    “The problem is that one never knows exactly where the top is.”

    True, but there is a tool that will tell when the top (or bottom) has just passed. It is called the “200 day moving average”.

    Go to:

    http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=sp500&time=8&freq=1

    Under “Time frame” change the “Time” to “1 decade”

    Select “Indicators”

    Under “Moving Average” select “SMA”.

    In the text box to the right of “SMA” enter 200.

    Hit the “Draw Chart” button.

    In the case of SP500 stocks (and in most cases, stocks in general), simply buy when the 200-day moving average is going up and sell when it turns down.

    My personal strategy is a variation of the following:

    http://www.mutualfundmagic.com/twoforthemoney.html

    Most mutual fund families have an “aggressive” stock fund and some type of money market fund. If the SP500 200-day moving average line is trending up, all my money is in the “aggressive” fund. If the SP500 200-day moving average line is trending down (as it is now) I move all my money into the money market account. On average these movements will occur about once every 5 years. I am, of course, putting money into my account on a monthly basis the whole time.

    Is it a perfect system? Of course not. However on the whole I capture about 80% of the upside and avoid about 80% of the down side.

    Is this system for everyone? Probably not. If your net worth measures in the millions you probably need something more sophisticated. Also if you have the time to spend doing the research, you could probably come up with something more effective. However for me it strikes the right balance of safety, effectiveness and ease.

  32. George says:

    @SteveJ -
    “An interesting twist that I haven’t made my mind up about is the impending retirement wave(Prediction of 20 million fewer American employees in the next 12 years).”

    Never forget that people still immigrate to the USA. That’s where the population growth has come from to take us from population 200 million to 300 million.

    Also, half of the potential retirees don’t have proper funds to retire, so they’ll keep working for a few more years (or return to the work force when they realize that sad truth).

  33. dulcinea47 says:

    What’s happening now is way more than a burst housing bubble. Do you know what Peak Oil is? Our whole society is based on oil. Not just transportation and energy but everything. Oil production is only going to decrease while demand (the aforementioned China and India) is increasing. To put it extremely mildly, it’s not going to go well for the U.S. It’s a totally new situation and I don’t feel comfortable applying the usual advice of “Don’t Panic” to these unusual times.

  34. Deamiter says:

    dulcinea45 — there’s an easy way to gain from “Peak Oil.” Simply buy stock in companies that will profit from higher oil prices!

    This is a decent general article about panic, but what I absolutely love here is all the comments. There are so many talking points, pet theories etc… I just find it fascinating how we all (myself included of course) pick one reason or another to help make sense of a fundamentally chaotic world!

  35. howie says:

    Your argument that over the long run the stock market has historically (past 100 years) gained in value is correct however thinking that that is the way it will perform in the future is flawed. What’s to prevent the Dow from slowly erroding to be triple digits again? Can any of us predict the future? My point is that just because something happened a certain way in the past doesn’t mean it’ll perform that way in the future and that goes double for the stock market.

  36. George says:

    @dulcinea47 -

    Peak Oil is only a concern if you believe there aren’t replacements. The only reason alternative fuels (and I’m thinking of the easy ones, such as ethanol and biodiesel) aren’t readily available in the USA is that their cost is higher than oil. When the cost for oil rises high enough, then you’ll see the country switch to other fuels.

    The world has already proven how desireable and useful the automobile is (people the world over are willing to lower their other budget items in order to have the freedom and mobility a vehicle provides), so they’re not about to stop using them. They’ll find ways to fuel that desire, even if it means the price of food is higher.

  37. Chiara says:

    “it’s not going to go well for the U.S.”

    That may well be true. None of us has a crystal ball. It may also be that things will change in a way we can’t anticipate now and life will chug right along (as it always has up to this point.) But we aren’t promised a rose garden and the collective sweet life might not be as sweet as it’s gotten to be. The advice isn’t just “Don’t Panic” – it’s, “While you’re not panicking, get your house in order: get out of debt, learn to live beneath your means and find inexpensive pastimes, save, stock up, diversify investments, and all the things we talk about here.”

    Then *if* there is a sudden shift (things always change, it’s the speed of change that makes for hardship), we will be in the best position possible to be hunker down and roll with it and be okay. We will also gain more flexibility to change our own lives rapidly in response.

    I wouldn’t pull anything out of the stock market anyway, because if the market “completely crashes!!”, then losing my retirement will be the least of my concerns anyway. For that to happen, the U.S. economy will have come to a screeching halt and all that cash money won’t mean beans anyway (and gold? ridiculous!). We’d be in apocalypse territory. Anything’s possible, I guess, but I’m not living my life worrying about THAT. (I come from a family that spent years getting rid of bags of grain and toothpaste from Y2K preparations. Ahem.)

    My personal opinion, FWIW, is that this too shall pass. Energy sources will change eventually (probably after a nice alternative energy bubble) and we may have to live with some ugly stuff like nuclear power. Maybe a lot of nice things that got abandoned after the 70′s, like good bike paths, will get attention and use, and there will certainly be fewer SUVs on the road. Oh, how I will appreciate being able to see around other cars again! :)

  38. K says:

    “The future of humanity is in China and India… All they care about is work & money”

    Sounds like there is a lot more to the future of humanity than work and money. A society who doesn’t raise their children with solid values does not have a promising future.

  39. Mary Beth says:

    Most of my money in the stock market is invested in mutual funds etc. which are in retirement accounts. Since I would just have to move them to other retirement accounts, I don’t panic when the market takes a downturn. I merely look at the quarterly statements when they come in and file them, knowing that in a year, two years etc. it will be back up and any dividends reivested in the meantime will be buying me more for my money. Admittedly, my DH and I have twenty or more years til retirement age but unless I was nearing retirement, I just cannot see getting all worked up about what is a normal market cycle. As we get closer to retirement, I will work harder to put money needed for everyday expenses into less volatile investments so we aren’t hurt if there is a down turn right before or soon after we retire. But I still would vote for putting the “extra” into the market. After all, retirement can also be a long term prospects (twenty years or more) and thus I would want some of my money in higher earning investments with the trade off of more market fluctation.

  40. jake says:

    when i look at the stocks out there right now, I feel like a kid in a candy store. There are so many great bargains out there, I wished I had money to more more of them.

    Great post Trent.

  41. Man, I am gonna be fricking rich when I retire in 40 years. You wanna know why? I am buying stocks on the clearance rack right now! Panic, shmanick…if you live frugally like Trent does, you wouldn’t be panicing right now. America can and will perservere. Just chill out, everybody.

  42. Robyn says:

    I think the to-panic-or-not-to-panic question is silly and puts people in an ineffective mindset. To choose to panic does no good and just diminishes one’s ability to think clearly and rationally – which everyone needs to do no matter what route you take. I agree with Trent’s point – panic sells. All those talking heads are set up in a position of “authority” telling the public what they should do. I think we should turn off the TV, calm down and make decisions based on clear-headed thinking. You’re the boss of your life not the networks.

  43. Dumitru says:

    come invest in Moldova.
    the interest rates for deposits are 22% in the national currency and 14% in dollars.
    the major banks provide you with this, a lot of foreign ppl are putting their capitals in moldavian banks

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