Personal Finance Review – When’s the Next Black Monday?
March 23, 2008
This article on Black Monday caught my eye yesterday. The general idea is that although market losses are bad, they also represent a buying opportunity for long term investors. The article lists the following three things that will help you invest successfully, despite market declines.
1. The quality of the companies you buy.
2. The price at which you buy them.
3. The length of time you own them.
Although I agree the principles are correct, I can’t help but wince at the thought of losing 22% of a portfolio in one day, even if it means a monumental buying opportunity.
I’m sure there will be another black day on Wall Street, it may not be a Monday and it may not be soon but I’m sure some variation of it will come again and we’ll all lose money : ( However, I’m not going to let that stop me from investing. I’m going to keep putting money away and probably even build up some cash reserves so I can take advantage of any enormous market drop.
Until then, check out the money articles I ran across this week:
The Digerati Life has a TurboTax Review and Generation X Finance asks if you think we’re in a recession.
My Dollar Plan shares how you can get free money from Upromise and Brip Blap continues his causes of failure series with the latest reason, insufficient education.
The Suns Financial Diary reminds anyone who bought an HD DVD from Best Buy before 2/23 that they can get a $50 gift card.
The Lazy Man describes why so many people are feeling poor and talks a little about the Money Writers.
Million Dollar Journey covers Informal In-Trust Accounts, it’s interesting to see how other governments, in the example Canadian, give their citizens tax-advantaged ways to save.
The Mighty Bargain Hunter points out a good way to remember your bills that you can’t put on auto-pay and Free Money Finance walks through how to decide how much life insurance you need.
Five Cent Nickel found a calculator where you can estimate your tax rebate and Blueprint for Financial Prosperity talks about the power of impulse saving.
No Credit Needed gives us 5 ways to teach kids about money and the Simple Dollar covers a new site called SmartyPig that you can use to help kids set & reach financial goals with the help of a bank.
All posts by Ben Edwards
While I definitely think we need to see another Black Monday, this seems to be the type of recession that will be long and drawn out rather than quick and painful. I don’t think we’ll see one single day of an enormous crash, and the closest we’ll come to it was that day in January when Apple dropped almost 15% in a single day.
This is just going to be the type of recessions where markets keep dropping then eventually pick back up. I highly doubt we’ll see a single day where the market drops 20%. It’ll happen over months.