Guidant Financial Group Blog

There is one thing that all American’s have in common: We were pretty darned scared yesterday. Do we know exactly why the market crashed? Not really. Does it matter? Not so much.

The bottom line is our financial market is having its knee caps broken by a big bully named “Greed.” It was the creature with a black hole for a soul that paid senior level executives at Fannie Mae and Freddie Mac tens-of-millions of dollars while they were running their companies into the ground. And now what does it do? It beats down its most loyal followers.

We guess that’s what happens when you play with the greed-eyed monster.

But we haven’t been messing with Greed. We haven’t been lured in by its slick, charismatic ways. So why does it feel like it’s going to fill Nikes with cement and force us to go for a swim in Lake Washington? Perhaps it’s because we’ve learned that when the big guys fall, so do the little people they stand on. At least, that’s usually the case.

A small measure of comfort, however, comes from BloggingStocks.com, which suggests that, in this particular case, most of us may get shaken, but we won’t necessarily fall. While the lending giants may have to drain their Italian-tiled swimming pools of cash, and those working in the crumbling financial institutions may get caught in the collapse, the majority of us will be able to go on living, spending and saving as usual (see What the Financial Meltdown Means to You – If You’re Not in the Financial World).

According to BloggingStocks.com, for those of us who don’t run or work for a multi-billion dollar investment firm, the effects on us could be minimal. The site expects that the stock market will mend, although it may not be until after the first of next year. It also anticipates that struggling banks will find buyers, money may be easier to come by and the housing market will stabilize.

So, although Greed may have won this recent battle, it may not be able to win the war – as long as we aren’t heavily invested in, or earning a living from, large financial institutions. Oh yeah. And for us self-directed IRA investors who, as a rule, are not quite as dependant on the Greedmeisters as other investors, we may be able to steer clear of the battlefield altogether.