Protect Yourself As The Market Falls And The Economy Slows

It's been a bumpy ride on the stock market throughout the last few days, opening Tuesday morning down nearly 500 points.  That, combined with a decrease in consumer confidence has prompted the fed to cut rates by three-quarters of a percentage point.

"Perhaps you need one cup of coffee to get things started, perhaps you need two, and sometimes you need three," said Lee Gibson, chief financial officer with Southside Bank in Tyler.  He said, Tuesday, the Fed gave the economy three cups of coffee by lowering interest rates to help boost economic growth.  And with rates as low as they are, he said now is the perfect time to focus on your finances.

"Take a look at who you owe money to, what rates you're paying, and [see if] there's an opportunity for [you] to refinance some of those liabilities," he said.  He said if you do have a need to borrow, you can now borrow at a cheaper rate.  And in a slow housing market, he says locking in a fixed rate mortgage is more possible, today than before.

"While there are some negative things occurring in the economy, there are also some opportunities," he said.

Those opportunities lie in investments.  Steve Mills with Wachovia Securities said investing in a fluctuating market helps put retirement planning into perspective.  "You want to make sure you have money spread around in different types of investments," he said.  For long-term 401k investments, he said diversification is key:  invest in foreign and domestic companies, emerging markets like China and India, and natural resources, such as gold and oil are also good investment opportunities.

"That kind of diversification, over the long term, will smooth out your volatilities," said Mills.  And in a volatile market, hopefully good planning will translate into worry-free financial futures.

Layron Livingston, Reporting.