Martha lost $50,000 from her retirement savings in the Wall Street crisis. Two financial experts say keep money in FDIC-insured banks, don't pull from your 401(k) during the downturn, and hold more cash if you're close to retirement. They can't predict when markets will recover.
$50,000 (about 10% of her retirement account).
About 40 years.
Taxpayers.
And good evening, everyone. As the government bails out the big Wall street firms, what about the little guy, the small investor who is worried about his life savings? There are plenty of questions being asked, and Ben Tracy has some answers from the experts. I don't know how much more of this I can take.
Martha Rodriguez was looking for reassurance from her financial planner today. When the market tanked on Monday, she lost $50,000, 10% of her retirement account.
Did I make a mistake investing my money this way?
Wall Street's woes are weighing on the minds of Main Street.
I feel really nervous about it.
So we asked two financial experts with a collective 40 years of experience to answer questions about your money.
Where should my money be right now?
I don't know whether it's better to just put the money under the mattress or stick with it.
I would not stick my money under the mattress. I would at least put it in a financially secure institution and earn some type of interest on it.
He says just make sure your bank is FDIC insured so your money is backed up. Aggressive stock investors are hunting for bargains. So what about your 401k?
Please don't pull it out of the stock market or your 401k in the mutual funds. Leave it in there. In fact, what an opportunity to add more money to your portfolio right now.
Are our retirement accounts going to be there for us when it's time to retire?
For those nearing retirement, you definitely need to keep a large portion of your assets in cash. If you're young and you have time, just let it ride. Leave your assets alone.
Who is going to be paying for these bailouts that we've been hearing about lately?
The short answer to that one is taxpayers. Doesn't sound great, but the experts say the financial meltdown that would happen without the bailouts would cost us all even more down the road.
The financial markets are resilient. This economy is resilient, and it will come back. I can't tell you when, but it will.
Long term, you're going to be fine.
Martha Rodriguez is willing to wait it.
Out, just sitting tight and letting it ride.
She just hopes the bumpy part of the ride is almost over. Ben Tracy, CBS News, Los Angeles.
