Guidant Financial Group Blog

For the first time in two years, the Dow dropped below 11,000 points today (see Dow Below 11,000 For First Time in Two Years). Oops.

And who do we have to blame? The financial markets, of course!

Fannie Mae and Freddie Mac are supposedly to blame for today’s high losses. The mass drop in the mortgage institutions’ stocks stems from the government’s announcement that the companies will continue operating as usual (without government intervention), despite the risk of collapse for the two companies.

It is in moments like this that we truly wonder what makes the stock market go up and down. Is it speculation? Actual valuations of the companies people are investing in? What is it?

A large number of our self-directed IRA clients still invest in the stock market. The ability to diversify their dollars into both the securities market and more non-traditional markets (like real estate) within the same IRA account definitely helps to lessen the blow of a “bear” attack like this.

What we would like to know is: Why do you invest in the stock market? What do you think drives the market up and down? What is keeping you from putting some of your retirement dollars into other assets?