Sep 16, 2008 5:43 pm US/Central
Experts Answer Personal Finance Questions
CHICAGO (CBS) ―
Some people are wondering, how the upheaval on Wall Street affect their personal finances. CBS 2's Kristyn Hartman hit the streets to find out what questions you have - then she went to an expert for answers.
Tough times on Wall Street hit home on Main Street. So it's no surprise people have concerns about the economic landscape:
"Is my money safe in a CD?" one consumer asked.
Morningstar's Personal Finance Director Christine Benz answered, "Yes it generally is if you're invested in short term securities at an FDIC insured institution. You are only insured on $100,000 per person."
If you have more cash than that in one place, Benz says spread it out, so you're covered.
Chicago Resident Tricia Fox asks, "Given the fact that the stock market took a big dip yesterday, don't you think it might be a good time to look at real estate?"
"The genesis of the market's current problems were in real estate, and it's probably a mistake to head too much back in that direction," Benz said.
Benz suggests diversifying your portfolio - taking things such as risk and age into consideration.
"Take a look at what your approximate breakdown is between stocks and bonds, and take a look at whether that's appropriate given your age and how long you have until retirement," Benz said.
The final question is about home ownership. The man asking it says his credit is good, he's working, and he want's to know: "Will I be able to get a loan today?" said Boston resident Richard Sher.
"With the bailout of Fannie Mae and Freddie Mac last week, the housing loan market appears to be easing up a bit," Benz said.
Her advice is to keep the credit record clean because lenders are choosier.
Benz also says you need to know home equity loans are more difficult to come by these days thanks to dropping property values. She says in a time of turmoil, one of the best things you can do is save 10 to 20 percent of your household income - putting it to work in retirement accounts.
As for stock advice: Benz suggests investing in companies that deal in non-discretionary items - companies that will grow no matter what the climate. Health care, food and consumer staples fall under that umbrella.
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