Has all of the latest financial news made you nervous? My own 401(k) has plummeted more than 15 percent since January, which doesn't feel good. But the only thing to do—unless you're among the Lehman employees who have suddenly found themselves without jobs—is to ignore all the drama about the markets plunging and bankruptcies being filed. While our portfolios may have gone down, those of us who buy into the market regularly (through 401[k] purchases, for example) are also purchasing stocks on the cheap right now, and the financial advisers I've spoken with say they still expect returns over the long run to be around 8 percent.
Here's how other bloggers are handling the news:
• The Budgeting Babe: "While the front-page stories haven't yet really affected me directly (as in, my day-to-day life hasn't changed), it seems a lot of other people are affected. Several of my young, capable friends are out of jobs. I know a lot of young couples hoping to "trade up" who can't sell their condos. Gas is still crazy expensive (really high today due to Ike), and credit is harder to come by. For those nearing retirement, 401(k)'s are a nightmare right now. Is America in for a major lifestyle change?"
• Money Under 30: "Lehman Brothers' and Merrill Lynch's employees and investors are having a bad, bad day. But if you're not one of them, how do the failures of these Wall Street giants affect your wallet today? Hopefully, you won't even notice it.... The principle of smart spending is the same in economies good and bad: Spend less than you earn, and save or invest the rest. Unless you have specific concerns about your personal job stability, there's no reason to spend any less than you normally do, as long as you stick to a budget!"
• Lazy Man and Money: "One analyst on BBC World was asked about Lehman's reported bankruptcy filing. He made a great point they don't have a steady stream of deposits—and they don't enjoy the same federal protections. This is in contrast to companies like Bank of America and Citigroup, who are much more diversified. It is this diversification that is allowing Bank of America to buy Merrill Lynch. Once again, we are reminded [of] the value of diversification."