I wanted to offer you all a little good news about this economic turmoil we are all going through, and that good news is, that you can relax and turn this into a positive experience! Let me explain how.

I know that my house fluctuates in value.  But I don't stand in front of my house  month-by-month or day-by-day, let alone minute to minute watching a ticker-tape of my home's value going up and down.  We all know that house values fluctuate, especially during a natural disaster like a hurricane or an earthquake.  But because I have no knowledge of the actual decrease, I don't think about selling my house as it decreases in value.   I think, instead, that I'll be in my house for a long time and the house value will recover over time.  Thankfully, there is no one to tell me how much my house is worth on a daily basis!  Knowing that information would, at best, ruin my sleep and at worst, provoke me to react in a financially self-destructive way.

Unfortunately, the information on the daily movements of my investment portfolio IS available to me.  Most of my money invested in the stock market is there to cover my expenses in the next 15-50 years; therefore, for some reason I think it's critical for me to know how my portfolio is doing minute to minute.  When I log on to  financial websites or listen to the news with up-to-the-minute information on the market, the news has the illusion of being useful.  And the media is being paid by advertisers to convince us that the information IS relevant.

The stock market is doing its best to provide a daily appraisal of the value of thousands of public companies.  But we're currently in the middle of a financial hurricane.  We all know it's unwise to sell a house in the middle of an actual hurricane, like Katrina.  So why would we sell our stocks in the middle of a financial hurricane?  History has always shown us that we must wait for financial storms to subside before the markets will fairly appraise our homes and portfolios.  Once  the storms subside and  the skies clear, the public, acting as an appraiser, is able to restore normal valuations.

It's simple :  keep your money diversified and take advantage of opportunities as they arise. Some of the richest people in the world made their money by staying centered and awake during the darkest days of a storm.

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful…Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over. –Warren Buffett

If I had to name one person who has cured his money madness it’s Warren Buffett.  He’s one of the very best investors of all times because he keeps his cool, he stays centered, and he does the thing that has been 100% successful  in investing:  he buys low.

No other area in life is as simple as this:  Buy low, succeed.  That’s it.  Most of us are confounded by money madness and allow our emotions to guide us to do the opposite.  Now is the time to buy, not run for the exit signs.  Now is the  opportunity to invest , to find new income possibilities, to buy a house that you were never able to afford before, to be generous.  The people who realize that their abundance comes from within, not from without, will stay calm and centered and, ironically, make a lot more money.  Many people have fantasized about a number which will bring them to financial freedom.  That number is a fiction.  Nobody feels free when they  get to that number.  The goal for your finances should be to feel sufficient right now and to believe in your competence and ability to be creative and resourceful and successful.  

This post is a response to this New York Times Op Ed Article.

I have found that many people don't take the time to invest when they should!! Take the time for your financial future as well!

With Central Bank’s all over the world making the decision to buy stakes in privately held banks along with statistics showing that most investors have capitulated by the end of last week (more money was liquidated from equity mutual funds last week than any other week in the last few months, which just goes to show that left to our own devices, human beings as a group prefer to sell low than to sell high), this is an excellent time to let go of your own money madness and invest. 

In other words, if we examine the investing world objectively without our emotions (which hardly ever guide us wisely in crisis situations), we find that everyone who bought in past situations like this made a fortune in the subsequent 10 years.  So instead of thinking about what might happen, think about the common sense wisdom of buying low, which has always, always worked, and buy a diversified portfolio today.

If you would like to hear more on this topic, please invite me as a friend, and join my Money Madness Group.

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