Yesterday morning, Cramer in an interview with the Today Show's Ann Curry, stated that investors who might need to utilize investments within the next five years should immediately re-assess their needs and "take it out". Cramer told Curry, "Whatever money you may need for the next five years, please take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market right now.”
Cramer's statement alluded to the turmoil that was occurring throughout global markets and the realization by much of the world that their economies strength was dependent upon the strength of the US economy. Cramer, pointed out the weekend revelations that European Banks were collapsing at an astounding rate, stating, "“One thing is certain — they are, in Europe, behind us. We’ve experienced more pain than they have, we are surprised at their pain, we didn’t know how bad off they were.”
Later in the day as the market appeared to be melting down, Cramer on CNBC told viewers that a decline to 7,700 point in the Dow Jones Industrial Average was a "real possibility". Once again, Cramer who typically focuses on informing investors of bullish opportunities, warned short-term investors to pull their money out. Cramer made sure to qualify his remarks by stating that the market turmoil is creating long-term opportunities for those who have the ability to ride out the storm; but for those who may need funds for children's educations, retirement income, home purchases or other needs within five years should watch the market for any short term bounce and pull those funds out.
The collapse of the large financials has raised serious concerns within the investment community. Typically, the financial markets have been among the last sectors to effects of a recession and among the first sectors to recover. However, the economic pressures being exerted today are a direct result of the combination of a weakening financial sector coupled by high energy and food costs. As a result, the markets are in turmoil and the extent of the global financial systems melt-down may not be realized for months. The time is now to re-assess your financial portfolio, budgetary and financial needs.
J Brown
October 7th, 2008
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