How will this impact my financial security?
Diversity has and will continue to be a key to long term security. In the 1990s, money poured into high tech stocks. Then they plummeted and some people took their money out of the market. The stock market lost 38% of its value, only the 10th worst crash in history. The highest monthly close ever was in October 2007 at 13930. It is now at about 10683 a drop of 23%. The market is about where it was 3 years ago, so we have lost 3 years of growth. In the 2000s, money poured into real estate. Now it is plummeting and taking the credit markets with it. According to US Census figures, the average and median cost of a new home both rose about 4% per year over the past decade. However, from 2000 – 2004 they rose 37% and from 2006 to 2008 they fell 13%. In the economy, what goes up too fast generally goes down too fast. Experts agree your best bet for long term financial security is to diversify and be patient. We all tend to over invest when markets are going up too fast and under invest when markets are going down too fast.