Plan to Take Action in 2009

I am sorry to say that it is foolish to think that a stimulus package will be an insta-cure. I think it is wiser to to keep in mind that it is going to take years to make this all right.
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I literally rang in the new (trading) year on January 2nd, presiding over the opening bell at the New York Stock Exchange. This was something I always wanted to do, It was an honor and a day I will never forget. What was so interesting to me however was this pervasive sense, or should I say wish, that just because we turned the calendar over to a new year, everything was going to be fine.

While I so wish that were true I have to say I just don't think it is going to be that easy. So many of you are acting that just because the Standard and Poor's 500 stock index lost 37% and the Dow shed nearly 32% last year that that somehow means we can't or won't see more losses in '09. As if there's some sort of rule against consecutive bad years. What is so important for you to understand is that there is no magic market wand you or I can wave to make this all go away. And I am so sorry to say that I think it is foolish to think that a massive stimulus package will be an insta-cure. I can only pray it will help, but recovery is not going to be quick and there are no easy solutions. So I think it is wiser to be realistic and to keep in mind that it is going to take years, my friends, to make this all right. Yes I said years -- in fact I think it will be till 2015 before everyone feels hopeful about their portfolio again. But that is okay -- for the years come quickly and sooner than later we will be there. Can you believe that we are already in 2009?

The first week of trading has pretty much summed up what I think we can expect for much of the year; The Dow opened at 8,772 on January second, rallied to 9032 on January 3rd and then hit a slew of bad economic news on the 7th that shaved the index back to 8,770, about where it started the year. I think it would be wise for you to get used to that seesaw; and if by chance at the end of the year we aren't lower than we are today then we should feel lucky.


Now all that said, I am actually quite hopeful that 2009 can be a prosperous year for millions of Americans. Working from the premise that a lot of us need to be shocked into taking action I think 2008 was plenty shocking. Scary actually. Right? That's why I rushed to get my 2009 Action Plan book out this week -- (you can download an e-version for free at through January 15th) -- Here's a quick run through the must-dos for 2009:

• If you have ten years or longer (preferably longer) till you need your money I would keep dollar cost averaging into high yielding safe dividend paying ETF's or stocks. If you are looking for income you might want to investigate General Obligation Municipal Bonds, they are a good buy right now. Just do your homework before buying and diversify.
• Get serious about an emergency savings account. As in an account at an FDIC insured bank or credit union. HELOCS are not a safe savings crutch in 2009 as banks are pulling lines, not extending them. If the recession persists, so too will the rise in unemployment. The only way to survive that is to have savings set aside in the event you become a downsizing statistic.

• Look into refinancing your home if you are going to stay in your home for at least another five years and you have an interest rate that is above 6.5% The rate on a 30-year fixed rate loan is 5.2%; even better if you can afford the payments is the 4.9% rate for a 15-year mortgage.

So here is the bottom line -- 2009 is a year to take many actions -- but it is not the year that will totally make all your financial troubles go away. With the right planning, the right moves, and the right attitude and information, we will survive and over time we once again will be a nation that thrives. Remember when it comes to your money there is only one thing that really matters and it is this: People First, Then Money, Then Things. Be kind to yourself and stay safe and debt free.

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