My Personal Finance Odyssey

The Fed decision to reduce the federal funds rate was absolutely expected.  However, the strength of the market response was not.   In just the last week or so, I’ve seen my portfolio go up and down as much as $8K in a day (including today).

I think the volatility is VERY FAR from being finished.  In fact, I had intended to finish off the funding of my Roth IRA for 2008 by plowing another $5K or so in the market yesterday, assuming we would see a steep drop because of the Bear Sterns thing over the weekend.   Well, it didn’t, and so my money remained on the sidelines, hoping for another drop.  Instead, I got quite the reverse.  However, I’m not feeling like I missed out or anything…it will drop again.

For those of you who have credit card debt and are reaping the benefits, you need to start thinking about how you can leverage the current situation to your advantage longer term.

• Home equity loan?
• Personal loan?
• Other?

As rates go down, the time will come to lock up your debt into a fixed interest rate that you can keep attacking mercilessly.  With luck, things might turn around again and you might end up in a situation where you are earning more interest than you owe on your loans!  This happened to me a couple of years ago when I refinanced my mortgage at less than 5% and now have $100K+ sitting in CDs earning more than 5%.  It can and does happen…it just takes planning…and some luck.