We ask local investment banker about your finances in this economy - KLTV.com - Tyler, Longview, Jacksonville |ETX News

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We ask local investment banker about your finances in this economy

Despair about a weakening economy is sweeping through Wall Street, despite the bail out passed by Congress last week - today, the Dow Jones dropped below the 10,000 mark for the first time in four years. At one point, the Dow was down 800 points, and financial markets all over the world are in a tail spin.

So, what's going on? What should be happening, and how should you react?

These are questions on your minds and ours, and we sent KLTV 7's Layron Livingston to find some answers.

Big bank busts, bureaucratic bailouts and sell-offs overseas - a fiscal perfect storm.

"We're in a financial crisis, there's no question about that."

Investment consultant Steve Mills estimates nearly $800 billion in market value were lost today, shaking the financial industry at home and abroad.

"The problem was we'd advanced in this credit crisis to a point where the rescue package wasn't enough,"

Now investors are in a frenzy.

"What we can't afford to have is another major financial institution fail in this country," said Mills.

And you may be, too. On average, stocks were down 10% last month.

"People getting their statements at the end of the month, they're going to be seeing their values down. they're going to get their 401k statements at the end of the quarter, and they're going to be seeing those values down," said Mills.

Mills says the Fed has already taken steps to get lenders lending again, including a possible rate cut.

Jason Amos with Edward Jones says historically, the stock market has been the best performing investment, and history is still on your side.

"Every few years, we have these times of turbulence," said Mills. "Throughout all of these downturns, the stock market has come out stronger. If you can stand the volatility, the best bet is to stay put. It's a great time to buy," said Mills.

For those in it for the long run - but in you are investing for the short term, moving a portion of your money out of the market could be beneficial into things like well diversified mutual funds treasuries.

And most of all, experts say, be patient.

"I think we may be close to a bottom, but again there's no way of knowing that. I think we're months, maybe even a year or so before we can work out of this situation," said Mills.

Certain uncertainty, in this business of risk.

The Dow Jones did rebound a little before closing this afternoon. It went from being down 800 points to 370 points down.

Layron Livingston, reporting. llivingston@kltv.com

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