jump to navigation

Fed Cuts – Market Soars March 18, 2008

Posted by pf in Expenses and Savings.
Tags: , , , , , ,
trackback

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.

Comments»

No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: