Even if you don’t have a subprime home loan, you are probably affected in some way by the current credit crisis. However, with the stock market doing the victory dance this week (including some record-breaking), some feel that perhaps the credit crisis has come to an end. Indeed, banks are jumping on the write-down wagon, an indication that they are ready to say “Oops. Our bad,” and move on.
But this IS October, and a stock market crash (or mini crash) could still be on the horizon. And the housing market is still down, and economic data is not showing such a robust recovery. But maybe the worst is over, even if, as MarketWatch reports, we are not quite “out of the woods”:
The debate is still underway among investors about whether this is over or not. While there are signs that the credit crunch is easing, there are plenty of market observers who say the evidence, including a reduced appetite for junk bond deals and what appears to be a permanently smaller commercial paper market, suggests the markets are not yet out of the woods.
As always, the best investing strategy is to “buy and hold” a company with good fundamentals. And in terms of other decisions, the best thing you can do for yourself is to get back to the personal finance basics of keeping your debt low, creating a financial plan and setting money aside for savings and retirement.