If you haven’t viewed the clip of Jim Cramer on CNBC, scroll down and check it out NOW!

David asks the question, “How would a real life market crash effect the net?” I am hear to tell you not to worry about that.

First of all, the market will not “crash,” at least in the 1933 sense of the word. The market does however make “corrections,” and it does so fairly often. A correction simply means that the stock market lowered sharply. I can say with confidence that the stock market will go down but it will also go up, and over time, it will go up.

This is why I recommend people should invest for the long term. If everyone invested for the long term and in a diversified portfolio, no one would ever lose money in the stock market. At least it would be the rare occasion, not the norm.

Who is Jim Cramer?

For those of you who have never seen his show or read any of his books, Jim Cramer is a former hedge fund manager. If you are unsure of what a hedge fund is, you can read about it more on my blog. Mr Cramer has a very entertaining tv show where he evaluates investments and viewers portfolio’s.

He also has several best selling books. You can find out more about Jim here.

So What the Heck was Cramer so Upset About?

If you have been paying attention to the news, you know that the stock market hasn’t performed very well the last week or so. This is mostly due to the problems we are having here in the US, in our sub-prime lending sector. Cramer was worried that the Federal Reserve was going to tighten credit and/or possibly raise interest rates.

This would be a very bad thing according to Cramer. On this clip he was dancing around and yelling a lot. He was mostly trying to get his point across that Bernake (the chairman of the federal reserve) desperately needs to not raise rates.

The good news came out 8/7, the Fed did not raise rates.

So is the stock market going to crash?

No. The stock market is not going to crash.

However, the sub-prime lending sector is still in shambles. Amid layoffs and homes getting foreclosed, things don’t look good for the sub-prime folks, and possibly even other lenders.

What Can I Do to Capitalize on the Situation and Improve My Position?

I would definitely recommend keeping an eye on foreclosed houses. Here in the near future there wil be a lot of money to be made flipping or renting foreclosed homes.

Also, don’t spend too much time worrying about the stock market. Just make sure you have a balanced portfolio that is adjusted for the amount of risk you are willing to take, and stick with it. Give your financial advisor a chance to do his job. He has you investing for the long term and you should commit to this. The stock market will go up and down however, over time will continue to go up.

Don’t sweat the small stuff. I am not saying that the recent losses the stock market are small stuff, you should just know that over an extended period of time the stock market will go up.

If you have any questions I would love to hear from you. You can learn more about me and my businesses on my blog, Josh Mullineaux dot Com.