Surviving the Storm

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With the economy not seeing any light soon, a lot of articles are talking about how we will be able to survive this crisis. Because of so much hype about this, I decided to share with you the article with the same title that is in TIME magazine on its October 13th issue. ****** Surviving the Storm TIME magazine 10/13/08 Dan Kadlec If you're like a lot of other people, you may have found yourself paralyzed when the financial markets began to seize up last month. That probably a good thing. Because it rarely pays to make money decisions quickly, expecially when the heart of the storm is upon you. But now is a good time to take a deep breath and review all your financial assets- and make a few key adjustments. We've just been through the most tumultous market environment since the Depression. We learned (again) that banks and brokerages can fail, insurers can go broke and even ultra-safe money market funds can lose value. But we also learned (again) that true diversification, patience and attention to risk are your best safety nets. Here's what to do now. HOLD MORE CASH This crazy ride may not be over. So the more cash you have in short-term securities like bank CDs, interes-bearing checking accounts, money-market mutual funds and treasury bills, the better shape you'll be in to ride out amarket slump and invest again when the economy stabilizes. GET FULL PROTECTION Every generation endures an event that reinforces the importance of federal guarantees on investments and savings. Your event just happened. But those guarantees have limits. So if you have a lot of cash with any one financial institution, you may not be fully protected. DIVERSIFY INTERNATIONALLY You should always have savings spread among large, medium, and small stocks, bonds and some cash in safe short-term-securities. It's more important now than ever before to include in this mix some foreign stocks and bonds.