In the first ten minutes of trading this morning, the Dow sloughed off over 1,000 points. Let that sink in for a minute. 1,000 points, by anyone’s calculation, translates into the evaporation of serious wealth. The only good news on the day that I’ve read is that it didn’t stay down a thousand. It’s a strange day, indeed, when the good news is that we kept the hemorrhaging to something under 600 points.
I’m as if not more risk tolerant than most when it comes to investing, but today had me following the rest of the herd and plowing everything into the (relative) safety of bonds in an effort to preserve principle rather than chase future performance. We’re in correction territory here… and definitive “bear market” status isn’t too far off – especially if we find another trading day or two like we’ve already seen this week.
Still, although this is big news and I find it all delightfully interesting from an academic perspective, I don’t think the sky is falling. I’ve got a mercifully long horizon before I’m going to need to dip into any of the funds I’m trying to diligently shepherd along. Nineteen years is an awfully long time to see the market surge and fall and surge and fall again and again before I need to worry. That being said, I would like to get through this mess quickly and find a bottom so the boys on the street can get back into the business of making money for all of us instead of finding new and creative ways to shelter and protect what we have already.
Today was an impressive example of the market’s ability to crush it on the way down. I don’t need to see them crush it on the way back up, but a little stability after a rapid downhill ride would be greatly appreciated.