Your Financial Questions Answered

With the roller coaster ride on Wall Street fresh on their minds, many people in Texoma had questions about what it all means. Newschannel 6 is looking out for you by taking your questions to financial experts to get answers.

Certified Financial Planner Gary Silverman, with Personal Money Planning, worked to provide answers to the concerns. Newschannel 6 took viewer questions directly to him.

Newschannel 6: I'm a Baby Boomer in or near retirement. I just took a big hit. Will my portfolio ever rebound? What should I do right now?

Silverman: Realize that what we just saw in the market is no different than what you are going to see several times during your retirement. If you look back the last few years, you will see 50% drops in the market just in the past decade.

Newschannel 6: Should I pull out of the market to cut my losses?

Silverman: The key is if you get out of the market right now is you will have locked in your losses. You should not have your money in the stock market for a short term goal, you never should have had your money in the stock market for a short term goal.

Newschannel 6: Is now the time to get into the market? Is it 'buy while they're low' a good strategy?

Silverman: Ah! The 'buy low-sell high idea'… A lot of people are of course doing the opposite, they bought in high and they are trying to sell low right now. Yes, this is an excellent time to buy if stocks make sense to you.

Newschannel 6: Should I cash out my 401(k)? What should I do with the money?

Silverman: You don't want to remove money from a 401(k) because you'd have to pay taxes on it and perhaps penalties because of your age.

Newschannel 6: Our facebook friend Kathy Green wants to know should we have our 401(k) in high risk or low risk investments.

Silverman: You have to understand how much risk you can take... Never build a portfolio with more risk than you can stand and that is why you have to come back and study and find out how much risk you have in a portfolio before you ever buy it in the first place.

Silverman said there are three elements to risk planning and you should speak with an expert to figure out what works for you.

Much of the other concerns have come from the lowering of the nation's credit rating. Silverman blames the political fighting over the debt limit for the down grade. He said using a possible default as a political weapon pushed things to the breaking point.

Newschannel 6: If the economy has been in such poor shape for a while, why did S&P just now decide to down grade the credit rating?

Silverman: S&P down grading the nation's credit rating, or anyone down grading the nation's credit rating was a surprise to nobody… After all the United States has been spending more they have been taking in for a long time.

Newschannel 6: What does that down grade mean to you and me?

Silverman: A downgrade of US Government debt eventually should mean that you pay more interest on that debt.

Many adjustable rate mortgages are tied to the bond market which is basically the US debt. The Federal Reserve announced Tuesday they plan to keep interest rates low through 2013, but if you have an adjustable rate mortgage, you should check with your lender to see how you may be impacted.

The biggest advice Silverman had is to just take it easy. Don't panic and don't make any rash decisions. As markets go down, they will also go up.

Paul Harrop, Newschannel 6