There is no denying that October has not been a good month when it comes to the economy and for stocks in particular. As of Monday, October 27, the S&P 500 Index had dropped 27.2 percent and is the second-worst performance since the Index began (the worst being 29.94 percent in 1931). A recent article on CNN Money.com points out that October has traditionally been a bad month when it comes to financial downturns. However, they do point out that things could have been worse.
The article recounts that while percentage declines in the S&P 500 Index harken back to October drops from 1987 and the 1930s, the similarities end there. Protection by the Federal Deposit Insurance Corporation (FDIC), as well as other government agencies and regulations, has safeguarded people against losing money deposited in failing or struggling banks. Another difference is the extraordinary step that the federal government has taken of bailing out banks, with an eye towards offering aid to other industries, such as automakers, whose success could be a key part of jumpstarting the economy.

The most immediate hurdle to cross, says the article, is getting banks to start making loans and offering credit to both businesses and individuals.

While the economy takes its first steps towards eventual recovery, you still need to plan on how to build up a nest egg for your retirement. NADART plans offer a number of investment options, including Target Dated Funds with a stock-and-bond mix that adjusts as you near retirement age. We also have online calculators to help you estimate how much you need to save for a decent retirement income. For more information, please contact one of our representatives at (800) 462-3278, ext. 7161 or by e-mail at nadart401k@nada.org.