Here's the scenario... Monday is a federal holiday, so quite a few people will get the day off, or will take a vacation day to stay home with the kids. Some of these folks will also take Friday off, to stretch that three day weekend into a four day weekend.
Mr. Dude: So have you seen the stock market lately?
Mrs. Dude: I don't understand it. I thought the big bailout thing was supposed to keep everything going while they figured this thing out.
Mr. Dude: It doesn't look like that's happening; the Dow dropped down to around 8500 yesterday. GM shares lost 33% of their value in one day.
Mrs. Dude: That's insane! Wait a minute... don't WE own a lot of those stocks in our mutual funds?
Mr. Dude: Well, I suppose so... because we picked those index funds ten years ago.
Mrs. Dude: So what's happening with our retirement money.
Mr. Dude: To be honest with you, I've avoided looking... also because they say we're supposed to be in it for the long haul... yadda, yadda yadda.
Mrs. Dude: Yeah, but I've also heard that some experts say if you're as close as retirement as we are, that we might need to have less stocks, because we wont' have as much time to make up a loss.
Mr. Dude: Hmm... well, maybe we'd better look.
[typing on keyboard]
Mr. Dude: Here it is.... The Edge of the Ledge Mutual Fund...
Mrs. Dude: Oh my god, is that right?
Mr. Dude: Wait a minute...
Mrs. Dude: That's $170,000 less than it was a couple summers ago when we were looking at it! And that doesn't even count all the money we've been putting in there since then!
Mr. Dude: Well...what do you think we should do? If we sell out now, we take the loss.
Mrs. Dude: If we don't sell out now, and it goes down more, we'll have even less money! Or none!
Do you think these guys really know what they're doing? They've never seen anything like this before. What if the company that runs this fund goes out of business like these other companies? What if the money just isn't there when we need it. How the hell are we going to retire?
Mr. Dude: Well... maybe we should take some out, and then if it looks like things are getting better, we can jump back in. I don't think we should take it all out... but we should probably do something.
Mrs. Dude: [Reaching for the phone] I think we need to take out the amount that we simply can't afford to lose if the bottom totally falls out. We've got to preserve a least that much. We can't afford to lose everything. Don't you think? We've got to save at least half... and if we wait to take action, it'll be worth even less. We don't want to be the last people trying to find the exit... this could really turn into a panic!
Mr. Dude: Well... I suppose we could take out half, put it into some sort of cash account, 6 month CDs or something... then we could always go back into stocks if things start looking a little more normal. We'd only lose the 6 months of appreciation, and the stock might still go up from there... but at least we'd have a little security...
Mrs. Dude: I think we should do it, then.
Mr. Dude: We don't have a lot of options. I don't think... If we were 30 or 40 years old, we could probably just ride this thing out...
Mrs. Dude: [starting to cry] I don't want to lose everything we've worked so hard for.
Mr. Dude: Don't worry, honey... we've got a plan. It may not be what we wanted, but we have a plan, and we're working that plan. We can work through this. I'm calling them right now. We're not going to lose everything. I'm calling right now. Everything is going to be fine. I'm calling.
