Much has been made of the disaster surrounding subprime lending and the subsequent government bailouts of large institutions such as AIG. The media has done an adequate job of scaring the masses to death, and many will do (as is human nature) the wrong thing and exit the markets licking their wounds.
However, if you can, stay the course and tune out the media. Why? History has shown that the government has always stepped in to correct large scale financial problems. Don’t believe me? Give this Wall Street Journal article on government bailouts a quick read (may require subscription).
The bottom line: the US continues to be a premier player in the world economy. Markets boom and bust (and will continue to do so) but as a significant world power we are relatively young. Sure, things will be a little tougher for a while - but keep your eyes on the horizon as US stocks are still the place to be in the long run.
Tags: government bailouts, stock market