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Several times today, starting before the market opened, I heard the sentiment expressed that "there is one thing we all can do for America, and that's buy stocks. Don't sell; you're siding with the terrorists if you do".

And my immediate response was "WHAT?!?"

I agree with the general point that over the long term, this too will pass. If your investment strategy revolves around broad-based indices that are held for the distant future with little or no attempt at market timing, then yes, you might as well hold on. Trying to time the market during a period of high volatility is a dangerous prospect that can cost you a lot. Also, now might be a good time to go hunting for bargains, stocks that are being pulled down more on current events than on the company's fortunes.

But...

The markets don't exist primarily to make me (or anyone) feel good. They exist to allow investment in corporations, as an engine of finance. In fact, the free and unfettered workings of the equity markets contribute tremendously to making our country the world power that it is.

Some companies will be badly hurt by recent events, and some may even be driven to bankruptcy. Does it make me a patriotic American if I watch the value of my holdings in those companies drop to zero? What good does that do?

If you want to be "patriotic", then give blood. Donate your time and services to organizations that will help the victims of this horrible act. But don't hold on to position that you truly believe will decline in value, solely because you want to be a "good American". If you want to give up money, do it the right way: give it directly to the Red Cross or other groups who can help people.

America isn't served by some misguided attempt to "prop up" the market for reasons unrelated to making a profit. America is best served by having the free, unconstrained capital markets that have made this country the place of choice for money from all over the world. Those markets have given us the largest economy in the world. Democracy ain't always pretty, and neither are stock markets, but in the end, they make us more powerful, not less.

Go long or go short, depending on your investment strategy, the time frame of your trades in that strategy, and your belief about future events. If you want to show your patriotism, then fly a flag and donate your time and money. The stock market isn't about "showing patriotism", it's about promoting capitalism.

And last I checked, by promoting capitalism I am being a "patriotic American".

-synchronicity
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