After a year like 2008, it is easy for investors to consider throwing in the towel on investing. Wouldn't putting money in T-Bills be better than riskng it in the market? Sure, the approach solves one type of risk - investment risk, but introduces another type of risk - purchasing power risk.
Needless to say, there’s a lot of confusion in the air right now. With multi-thousand page bills being rushed through Congress and endless speculation on new regulatory and tax proposals, the line between proposed and enacted legislation can be a bit blurry. Financial Planning Magazine had an article entitled “Unwrapping the Package” which lists some of the items in the American Recovery and Reinvestment Act of 2009 that you can benefit from. To read the article, follow the link: http://www.financial-planning.com/fp_issues/2009_5/unwrapping-the-package-understanding-stimulus-bill-2661665-1.html
Watching the news each day, we hear about the effect subprime lending has had on the market and the economy. The untold story seems to be the how and why those borrowers took out the subprime loans.
The investment community is struggling with the issue whether capitalism will continue in its present form. Up to this point, winners of the 2008 Presidential election cycle have created more uncertainty than clarity. Look at these examples:
Diane Blackwelder was recently interviewed about the Al Parish proposed settlement on Channel 4 News:
Identify theft is now the fastest growing crime in America. There were about 10 million cases in 2004. Since February 2005, major data handlers, including LexisNexis, ChoicePoint and CardSystems, have reported breaches that left the data of more than 50 million people at risk. Congress is beginning to stir, cracking down on the crime. In the meantime, you need to take some preventative measures.
Weston Wellington of Dimensional Fund Advisors (http://www.dfaus.com/) puts the current financial crisis into perspective with his six part series of videos, “What Should investors Do Now?” (http://www.dfaus.com/share/whatshou/). His use of historical materials and articles are both interesting and essential to understanding the psychology of investing.