Fed Slashes Rates:
Your 3-Step Action Plan

1. Get more conservative with your investments. For heaven's sake, don't fall prey to the Wall Street mantra of "buy on weakness." There's more trouble ahead. If you heeded our prior warnings, you are now sitting comfortably and safely in cash. Stay there! If you haven't yet, start your move to cash now. (And stay tuned for an article coming very soon about the best ways to invest during a recession.)


2. Increase your savings now. When the economy is struggling, you want to make sure you have cash in reserve for not just a rainy day but a rainy season. Things cost more, and the job market is getting tougher. Try to build six months worth of expenses in reserve to weather the storm. To earn a decent return on your savings, we like certain types of money market mutual funds right now. (Get the details here.)


3. Consider refinancing your mortgage. Mortgage rates are dropping, and we wouldn't be surprised if they drop even more in the wake of today's cut. If you have a higher interest rate or an adjustable mortgage, now may be a terrific opportunity to lock in a 30-year fixed loan at an attractive rate. (To help you determine if it's cost effective to refinance, click here to use our special calculator.)

We'll leave you with this important thought: While things are a little scary right now, we will get through this -- together. We won't sugarcoat it (we never do!) and tell you that it's going to be an easy time in the coming months, but we've been through times like these before. Rest assured, we'll help you through it every step of the way at Dolans.com.