Updated 9/30/08: Market swings shouldn't panic long-term investors

September 30, 2008

Long-term retirement investors should keep their focus on their goals, and not on short-term market fluctuations, even with recent volatility in the market that have led to some of the worse trading days since the Sept. 11, 2001, terrorist attacks.

On Monday, investors witnessed the Dow Jones drop almost 778 points — about 7% — in the wake of the House of Representatives’ rejection of the Emergency Economic Stabilization Act of 2008. The S&P 500 and Nasdaq markets each saw similar percentage declines in value.

Monday’s market decline continues a volatile month on Wall Street brought on by an expanding credit and liquidity crunch. September has seen investment bank Lehman Brothers fail, Bank of America purchasing Merrill Lynch, a bailout of AIG, the purchase of Washington Mutual by J.P. Morgan Chase and Citigroup’s purchase of Wachovia. A rescue plan, supported by the White House, both presidential candidates and Republican and Democratic Congressional leaders failed in the House by a slim margin. The House is expected to take up the proposal again Thursday.

Read more about how investors should respond to this volatile market.