Wall Street Reform.....Not Really.

Before anyone gets all warm and fuzzy feelings about "Wall Street Reform", please read what the bill contains. To sum it up in a sentence, the bill attempts to increase the regulation of Wall Street. As with every bill that comes out, it fails to address the real cause(s) of the problem it is attempting to fix. Basically, it is a dog and pony show of BS. The main causes of the problems we are facing today is that Wall Street firms are allowed to contribute money to political campaigns, which obviously creates a conflict of interest. Also, Bill Clinton engineered the repealing of the Glass-Steagal Act of 1933, which allowed depository banks to own financial institutions. These two factors have allowed things to get out of hand. Now, the politicians are trying to take advantage of the volatile situation by putting the squeeze on Wall Street in order to cash in by extending Washington's reach, which is never the answer. The reason why this will not work is because the guys on Wall Street are far and away much smarter than the guys in
Washington.

Until the structure and not the regulation of Wall Street changes, things will not get any better. Since that will not happen any time soon, the best you can do is pay down your debts and build up your savings. Keep a healthy amount of money in reserve to take advantage of the dips in the market. Track your holdings and not the broader market, even though the swings in the broader market will affect your individual holdings in the short-term, they shouldn't affect them to the same degree in the long-term. If you own solid companies or mutual funds that have solid management, you should profit in the long-term (15+ years).

Finally, stop listening to the media. The media reports on events that have already occurred, which does not help investors. Currently, they are talking about the market "heading for a correction" after the DOW has come down 10%. I've been calling for the correction for last couple of months. The market is still about 10% overvalued at this point, but it might be a good idea to look at the energy sector (especially oil) as it has gotten beaten up a bit and it could be a good idea to start buying into the dip. If the DOW dips below 10K, we could see a big move through 9500. I'm still holding that the DOW should be around 8800 to be fairly priced, but as we know, the market is never fairly priced. Good luck and keep researching your holdings and tune out the press.