Well, It’s Thursday, January 24, 2008, and unless you have been living under a rock, you have to know that the markets have taken a huge hit over the past few days/weeks. The numbers have reached such levels that most of the experts have agreed we are past a “correction” and approaching a full blown recession.

To clarify these terms a bit, a recession is defined as the economy has had two consecutive quarters of negative growth (as determined by a decreasing gross domestic product. A Correction is when you have a decline of 10% in a stock or in this case, the overall market. A correction is viewed as normal; the market is cyclical. When that figure reaches 20% some say we are past a correction and into a recession, which can lead to a depression.

Luckily, it seems like we may avoid that. There has been an emergency reduction of the prime rate by .75 points. It was the largest cut in the federal funds rate since 1982. This will help to help combat the market’s drop. The drop seems to have slowed the trend and may help to reverse it.

What does this all mean to the average investor? It means that the value of your portfolio has very likely dropped, but the lion’s share of the drop is done. This is not the time to decide that the market is too risky. Actually the exact opposite is true. The losses we have seen have already taken their toll, and now the time is ripe to buy. If you take the opposite stance; what are you really doing? You are selling low, with plans to buy high. Not the best plan for your future worth.

My thoughts are to hold on and continue to add to my portfolio. These are the lowest prices we are probably going to see for a while, so why not buy low and continue to hold?