Today was another wild ride in the markets. At one point the Dow Industrials were down over 200 points. After an infusion of cash by the Federal Reserve into the system, the markets rebounded to the Dow down just over 31. The Dow has lost almost 1000 points since it peaked at just over 14000 just a few weeks ago. The financials which were hammered on Thursday bounced back a little today. In fact there are some analysts who think that the big banks are now a buy. I am heavily weighed in the financials in my current portfolio. I know many think it is unwise to be anywhere the financials right now. As a long term investor, I am prepared to ride out the storm created by the subprime mortgage crisis. I am of the opinion that Citigroup, JP Morgan Chase, and American International Group are such large diverse companies that fallout from the problems created by the subprime mortgage meltdown will be limited. Just this week AIG’s release of 2nd Quarter earnings appear to support this thesis. This may be the time to buy into the financials. As always remember I am an amateur investor. You should do your own due diligence to be sure if any particular equity is right for your portfolio.
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