Now what is he going to say is the true low for the market?

You are also spot on about the value of companies going up and down that much. The issue right now is fear, and the fact that no one knows how much the banks are tied up into this whole credit issue. The liquidity crunch can affect everything from companies making payroll, to banks loaning to small businesses, to banks lending to each other…

He said take the portion of your money that you’ll need within 5 years into safer investments, that seems like fair advice. You probably should have done that before today, though. (Wouldn’t you feel good if you’d done it a year ago.) A few weeks ago Cramer advised rank your stocks from 1 to 4 based on your criteria for potential, and sell enough #4s (lowest) until you’ve put 20% of your investments into cash.

These stock values don’t reflect the ownership of companies right now. John Bogle of Vanguard was on CNBC a couple weeks ago, he asked if anyone actually believed the value of these companies went down $1 trillion one day, then went up $1 trillion the next. Of course not, we’re still suffering through stock market shenanigans, somehow the trading has gotten divorced from what the stocks represent. It should come back into line although as Kevin says it’s going to be awhile.

Paige and Kevin, regarding “retiring today”, you still are going to have investments you won’t redeem for 5 years. I’ve been doing a re-allocation this year with that realization in mind. For some of my Rollover IRA I’m using different target funds (for example Vanguard 2020 and Vanguard 2025) with the idea in mind that some of my investments are going to stay put until I’m several years into retirement.

@Philip: I think we still have a way to go before it bottoms off. I’ve heard estimates of Q4 2009 / Q1 2010 before we start to see an economic recovery. Good news is that means stocks will remain cheap for the time being. Any way you cut it, 30 years from now those same stocks should be worth much, much more. We have time.

@Brian: The issue isn’t whether it can be fixed right now. It’s all about perception. Look at today, massive worldwide fed rate cuts — and the market is down 1-2%. But you are right, with a long enough time period things should recover.

@Paige: The headline makes it seem like he is saying sell, sell, sell. From a risk management stance, if you are retiring today… you need to get out of stocks… or at least a majority into safer investments.

I feel very strongly about it and really its all a whole load of crap. This is the best time to buy stocks. That is the fundamental rule of any stock market crash. You buy good fundamentally strong stocks when the market has crashed and only then will you make money. Anyone who has been long enough in the market knows that you should sell when everyone buys and buy when everyone sells.

This is the time when everyone is selling.

So is he wrong for saying the same thing I see when I check my vanguard accounts? Would YOU recommend that people wanting money right back out to put their money in the market right now?

I still think that the markets are coming back to where they should have risen to, maybe going a little past but then will be a nice spot for me to start my investment timeline from.

I keep hearing some other employees talking about what they should do, and quite a few have moved their money from the stocks to money market and this is probably good for some of the ones about to retire.