Freaking Out

Why is everyone freaking out about the economy? I just don’t understand it. It’s been a long time coming, and it’s not the first time that we have had a financial market crisis. Do we not remember the Enron scandal? How about the first day the Stock Market opened after 9/11/01? What about Black Monday? Every time something “horrible” happens, people panic and the stock market goes down. Does anyone know what happens after every one of those incidents?

THE MARKET AND ECONOMY RECOVERS!

I just don’t see why people right now are selling their stocks in a panic. And just because the stock market is going down, doesn’t mean that the economy is in trouble. My mother and I have close to 35 years combined in the investment/banking industry, and the one absolute fact that every time there is a financial crisis, our economy recovers. But people don’t see that.

What they see is the financial managers (I’m talking about the investment managers that manage mutual funds) holding all those individual stocks in their mutual funds selling those stocks and everyone says, “OMG! I have to sell before my paper gain becomes a paper loss and when the sell, their paper loss (a loss only on paper) becomes an actual loss and they blame the economy for loosing money on their premature sell.

The media is the one to blame for over-hyping this “crisis” just the same way that they over-hype the price of gas in the summer months. I recall one outlet (I don’t remember who) predicting that gas will go to $7.00 a gallon...the closest it came to that was $4.05. That’s $2.95 off from their prediction. And there was a reason that I never mentioned the price of gas on my blog...that reason, I didn’t want to fuel the fire (no pun intended).

So this is a message to all those people panicking out there: GET OVER IT! IT WILL RECOVER!