Credit Crisis

If you have been paying attention to CNBC or any other business channels that past couple of days you will see that the term Mark to Market is being thrown out there a lot lately. It is an insider term but it really does effect the everyday person and their investments that they might be trying to make in this topsy turvy market.

The term “Mark to Market” definition according to wikipedia is “an accounting methodology of assigning a value to a position held in a financial instrument based on the current market price for the instrument or similar instruments”. This basically means when I have a contract such as a futures contract, when I go to report this contract for accounting purposes I can mark the value of this contract the value that it is the day that I fill it out and not the value that it will be the day it expires.

A lot of the professionals out there are starting to sing the joys of Bio Tech since the election of Barack Obama to president. You might be asking yourself what the hell is BioTech? According to wikipedia which has been the easiest to consume definition that I have found it basically means, “technology based on biology, especially when used in agriculture, food science, and medicine“. That is basically what it is in a nut shell. So okay thanks for the definition now what does this have to do with Obama? Ah my young padawan(star wars reference) I am slowly getting there.

The worst thing that you can do when the economy turns sour is to become scared. Warren Buffet has advised people to start buying equities now to prepare for the eventual turn of the market. He is only partially right. Yes you do need to be prepared for the eventual turn around of the market but unlike Buffet you can not afford to let your money sit in the market watching as the value slinks further and further down waiting for the day that it finally shifts. The main thing that you need to do now is plan and plan well for the eventual turn around.