I write this on Martin Luther King Jr. day. Before I get into the body of my post, I want to take a moment to reflect on and appreciate the civil rights that leaders such as Martin Luther King Jr. fought for all Americans. We are lucky to be in such a nation, and we should not forget not only the sacrifices made by others but principles that have allowed this country to always strive forward.

I can say with near certainty that U.S. Stock market will not be striving forward today - I’m posting this on the day after MLK day when the markets open once again.  While Wall Street rested, the stock markets of the rest of the world gasped in collective worry.  The world is worried about the U.S. It seems international stock traders haven’t gotten the memo that global economy is much less tied directly to the habits of the U.S. Consumer than in the past. Around the world markets fell anywhere between 3.9 (Japan) to 7.4 percent (India). The U.S. market escaped the carnage by not being open, however S&P futures fell 55 points or around 4 percent.  If the futures are to be believed, it’s going to be ugly.

I agree with the usual advice, “Don’t panic. Don’t do anything rash.” However, not panicking does not mean doing nothing. For those who haven’t been more diligent about rebalancing in the recent past, it’s still not too late to do so. The market is down nearly 10% this year, and is off from it’s highs nearly 17%. Once the market reaches a decline of 20% as it’s likely to do today, we’ll be officially (at least according to some) be in a bear market.  Take the time to evaluate if your portfolio lines up with your goals.  Are you overweighted in some sectors because they’ve been winners, and not because that’s what you want?

I don’t know where the market is going, but declines like we’ve seen in the last month is a gut check. With any gut check, it’s best to check in with the head as well.  This too will pass, but who knows when.

In Late:  The Fed Cuts rate by .75, and the global market fall even further on Tueday 1/22/08 trading