The Dow Jones Industrial Average tanked by an astonishing 778 points today - closing at 10,365.  That makes today, September 29 of 2008, the largest single day point loss in history.  Worse than the dot com crash.  Worse than the freaking Great Depression.  Before you get too worked up - remember, it’s the largest point loss, not the largest percentage loss.  Even so, it was quite a stunning day in the investment world.  The big reason, of course, was that the $700 Billion bailout plan failed to pass the House of Representatives.  Wall Street was counting on that big pile of free money to come through in a hurry - and they got a little shaken up by the failure.  In related news, Gold skyrocketed to close at $905 an ounce.  The stock market and gold do tend to move in opposite directions ( that’s not a hard and fast rule, just a generalization.  Gold tends to inversely track the dollar. )

The bailout isn’t dead yet

Undoubtedly, the bailout plan will be tweaked and re-written enough to get through the House.  I still disagree with the plan on principle, but I don’t hold the power to vote against it.  When it does pass, Wall Street will recover nicely.  At least in the short term.  See, folks on "the street" have a long history of acting irrationally, and thinking only in the short term. 

Use this as a learning experience

If you are investing for short term profits, be very sure you know what you’re doing.  Chances are, you don’t.  If you don’t, stay away!  Stick with long term investing with index funds or proven companies.  Or, take the chance on a small company that you’ve researched heavily.  But above all, don’t act irrationally.  Take emotion out of your investment choices, and stay the course.  Time and again, "buy and hold" has proven to be a remarkably effective investment strategy.  All that bad news out there is worrisome, and there’s no doubt about that.  But don’t panic now, just sit tight.  Eventually ( could be a couple years from now ), you’ll be glad you did.

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