The Stockmarket Crash

Massive stock sell off.
As I write this blog, there has been a massive sell-off in the stock markets around the world. The U.S. Dow average tumbled below 9000. Millions of people are losing their life savings. Some are beginning to call this a market crash.

Where should my money be during this time?
If you are young and invested in the stock market, you should not panic. In time, most of the value of your portfolio will return. If you are 50 or older, you should have very little in the stock market. Your money should be in money market funds, CDs, and bonds. However, if you do have a large amount in stock, it may be too late to sell. You may be able to ride it out. Once you sell, you lock-in your losses. The stock market will likely fall again tomorrow. At some point, it will reach a bottom, then start a slow climb back up. The U.S. is resilient and will rebound. So you should get some of your money back in time.

There is hope.
During the 1929 crash, the government did nothing. Because of that policy, the people of the U.S. went through a very difficult time with massive unemployment, and bread-lines. While the recent unemployment figures rose, it is nowhere near the 25% figure of 1929 and 1930. This time the U.S. is using every tool available to get money into the banks which will then get to large and small businesses. This will help the economy. By the way, the next several years is not the time to increase taxes or to have big social programs such health care for everyone. A tax credit to be used to buy health care would be beneficial.
The G-7 countries will be meeting in Washington on Saturday to try to find a solution. China, who is not part of the G7, has pledged to do everything it can to help. It owns over a trillion of U.S. bonds, and if it signals that it will buy more, this will show their faith in the U.S. economy. That, in turn, will help the stock market.

Where is my money?
About 90% of my money has been in money market funds for some time. I have been advising to get out of stocks for several years. I have only a few dividend-paying stocks. When the market reaches the bottom, I may buy a few more.

There are several MM funds I can recommend. The best one is Vanguard's Federal money market which is invested only in treasuries. The next best one is Vanguard's Prime money market which has about 56% invested in treasuries.

Remember, the darkest moment is just before daylight. It will get dark and look bleak for the near future, but the United States will lead the world out of this crisis.

Where to put your trust.
I leave you with the words of David from 20:7: Some trust in chariots, and some in horses; but we will remember the name of the Lord our God.

There is only one place to put your trust in times like these. It is not in the stock market, or the government; it is in the name of the Lord Jesus, the messiah.