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Buy, why?

Stock market is crazy, credit is tighter, nehemiah is gone, no money for down.

Allocate MORE to 401k?  Are you crazy? 

No I'm not.  The same reason why you would consider buying now- It's affordable, prices are great, etc. are the SAME reasons you buy stocks.  Recessions come and go.  this one is a doozy by all means.  What you must remember is that this happened in the late 80's and early 90's. Look how much money has been made since then.  If you are looking for long term investment stocks and housing are the places to be.  Credit will loosen, prices will appreciate in both stocks and housing.  Remember, when there is blood in the streets, that's when it's time to buy. 

How can the fed lower rates and 30yr fixed rates go up .5% in two days.  Investors are pulling their cash and holding.  The market is serverly oversold.  With 30yr bond yields at 4.1, our 30yr rates should traditionally be around 5.25%.  When you can sell something, you lower the price to gain interest.  WELL, the same holds true for bonds.  If there are no buyers, you have to make the spreads(how traders make their money) more appealing to investors so that they will purchase the security.

Some words of advice- patience.  My mentor told me when there is blood in the streets, it's time to buy.  I'm putting extra in my 401k right now because prices are low and there are deals out there.  yes the markets still may go down, but they WILL recover eventually.

10/9- Yes yesterday the fed cut rates.  Then we lose .25% in 30 year rates from the morning to the end of the day.  You may be wondering, how can interest rates go up, when the fed lowers rates?  HEre are a few things to remember:

1. When the fed lowers rates, it's usually to the prime lending or discount rates.  Yes, your equity line will improve, but there is NO direct effect on 30 year fixed mortgages.

2. More importantly, the market had already priced in the rate cut.  Last week on CNBC, analyst were already talking about the fed having to cut rates this week.  The market responds and rates improve up until Wednesday A.M.  I cannot tell you how many times I've seen rates go up the date the fed lowers rates.  It's the nature of the market.  It makes it hard for us professionals to have to explain this, but so is the way of our often whacky financial markets.