The stock market took another dive today. I understand that profits are down enormously at many companies. And I'm following the mortgage-driven AIG mess. I get it. But that's enough of this crap.
Let's take a step back. The idea behind stock prices is that you're buying at a price you believe makes it a worthwhile investment, based upon the economic viability of the company, the future of its products, the future of the economy, etc.
Keeping all of that in mind, we then look to the current economic situation. Even after the cost of this mess, is there any sense in the thought that American companies' futures hold less than half the economic promise they did just months ago? Not that I can see. From the irrational exuberance we once saw in the markets, we're now in a time of irrational pessimism.
Still, it's hard to just grin and bear it. It's all paper losses at this point, but those losses are huge. Marc and I have been saving for a long time. Seeing money socked away over those years disappear is tough.
Of course, bailing out now would be a huge mistake, since there will be an upswing eventually and running to safety now will make us miss at least part of that turnaround. Still, every drop in the market is gut-wrenching. I wish this would settle down already. Emotions are driving the whole mess, and that's the real problem. Logic has little to do with any of this.