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July 07, 2005

Avoiding Financial Over-reaction

Loathe as I am to give financial advice to anybody, I think I'll post about it anyway. The London attacks sent US stock futures plummeting this morning and the indices have all opened down. The European exchanges are all down right now.

Although understandable, I think this is an inappropriate reaction to the London bombings. The appropriate reaction is to pray and give aid and comfort in any way possible. It is not to go sell your retirement plan. Rather than calling your broker, or logging on to sell, wait a few weeks and months to see what the real aftermath is. Nobody has any basis at the moment upon which to make what could amount to a dramatic financial decision. Hold the course. Wait for more information. Say a prayer instead.

Update: Two articles on CNNMoney online provide more analysis on this point: See here and here.

Posted by Mark at July 7, 2005 09:49 AM