Posted by: Michael Mandel on October 17
In case anyone is interested, I moved some money out of money markets into the S&P 500 today. Not all the way back in…but part of the way. (My last market move was in mid-december, when I moved about half my portfolio out of stocks.)
My reasoning is that the size of the debt problem is enormous but finite…I’ve been estimating roughly $3 trillion for the U.S., with a somewhat larger global number. Investors have seen roughly a trillion dollars in write-offs, the government has pumped in roughly a trillion dollars in bailout money, and the market is pricing in a recession which will cut back consumer spending by about a trillion.
So even if the market and the economy keeps going down for a while (including today!), this strikes me as a good time to invest.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.