First, do not let emotions overwhelm your sense of reason- avoid panic. The market is encountering a crisis in confidence. This is not the same as a financial crisis or a recession, although, a prolonged crisis of confidence can lead to either if the crisis in confidence lasts long enough. The FED realizes this. The FED has stated several times in the past they will take measures to support the economy. I believe, more probably than not, that the FED will move to support the economy and its actions will be well coordinated with other central banks around the world. This action could be impressive and the stock market’s WOW factor may be big enough to ignite a substantial rebound in stock prices. I am confident you would not want to sell now and miss the rebound if and when the FED acts.

To be clear, the timing of a crisis of confidence and the actions by the FED are extremely difficult to forecast. I recommend that you do not attempt to time these events – avoid succumbing to the emotional drama put forth by the news media. Let’s wait to see what the FED announces at 2:15pm on Tuesday 8/9/2011 and observe their subsequent actions.

Let me know if you have any additional questions.