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Oct 6, 2008 7:59 pm US/Eastern
Expert Answers Questions On Latest Market Plunge
Business Week Editor Warns Not To Retire Right Now
NEW YORK (CBS) ―
With the economy continuing to take a turn for the worse, consumers are asking many questions, eager to find out how they are affected and what they should be doing with their money.
Business Week's Personal Finance Editor Lauren Young spoke to CBS 2 to answer some of those tough questions.
CBS 2: Why is it such a big deal that the Dow dropped below 10,000 points?
LY: "It's a really psychological threshold. Let's face it, the Dow is 30 companies, they're large U.S. companies. It's not reflective of the broader market, but this is the number that everyone focuses on."
CBS 2: So what should investors and consumers do now?
LY: "Sit tight. You have to make sure you have a good mix of assets right now because it's really important to have the right mix of stocks, bonds, and cash, but beyond that there's not a lot you can do. I'm actually telling people when you get those account statements in the mail for September, don't look at them. They're ugly. You're just gonna get freaked out, so why bother?"
CBS 2: What if you're considering retiring right now?
LY: "This is really important. I'm actually telling people do not retire right now. Every year you work right now buys you about three years of retirement, so if possible, put it off because this is a terrible time to be drawing on a depleted nest egg."
CBS 2: Is there any hope for those trying to secure a loan right now?
LY: "There is some hope if you're the cream of the crop. Lenders are only giving money to the people with the best credit, the best scores. And when I say best, it's 700 out of the score of 850, so you really have to have great credit, but you can get money, you just have to pay down your credit card bills and you have to keep your balances below 35 percent of existing credit, that's how you really are gonna get the best score."
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