On the day General Motors filed for bankruptcy, the New York Stock Market gained 200-odd points! Just weeks before the market climbed when Chrysler filed for chapter 11 bankruptcy protection.
One would believe with soaring unemployment figures, thousands of homes in foreclosure, retail sales declined, the second largest shopping mall developer in bankruptcy, car sales almost nil that the stock market would not be recovering.
Oh, yes, and another eight banks joined the growing list of financial institutions that are taking TARP funds. That brings the total to 616 banks across America.
And, did I forget? Oil is up above $60 a barrel!
Why is the stock market above 8,600?
How do people like us, ordinary folks, understand the stock market to assure that our 401(k) accounts can regain their losses and will be able to support our retirements so that we don't slip into poverty? When the market acts irrationally, how do we know what to do? Most of us already got burned with investment plans that invested across the board--small cap, mid cap, corporate bonds--those asset allocations didn't work because all of their parts lost value.
Yesterday Ben Bernanke, chief of the Federal Reserve, spoke before Congress and warned that our deficits are a larger percentage of gross national product than anytime since World War II.
That is unsustainable. What are we to do? As we Baby Boomers age, we won't be able to retire if we don't figure out what to do with our savings so that we can leave the workplace, making room for younger workers. I long for the time when I can spend my time volunteering, gardening, and reading, but right now that seems impossible despite all of my family's conservative investment strategies.
Under the mattress seems more reasonable than the irrational stock market.
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