What a dive...

For the light of heart, now would not be the time to check the stock market. I'll leave it at that for now and reiterate that you probably shouldn't check in on the market until next year.

As I said previously, I'd like to dissect the differences between the tradition and Roth IRA. With the Roth IRA contributions are made with after-tax assets, all transactions within the IRA have no tax impact, and withdrawals are usually tax-free. With the Traditional IRA contributions are often tax-deductible, contributions are made with pre-tax assets, all transactions and earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income (except for those portions of the withdrawal corresponding to contributions that were not deducted). There are also various other types of IRA's, but the traditional and Roth are by far the most widely used, so we'll stick to those for now. The maximum contributions to an IRA changes from time to time and varies depending on your age. Obviously the IRA was founded and exists to encourage savings and investment by offering a reduced tax consequence.

Contributions to a Roth IRA are not tax deductible, but at withdrawal, all contributions and earnings can be withdrawn tax-free. With a traditional IRA, contributions are tax deductible, but all withdrawals are subject to being taxed. Currently, since dividends and capital gains tax rates are generally lower than an individual's marginal tax rate, using a traditional IRA for long term investing doesn't make sense in a majority of cases. Furthermore, the Roth IRA has the advantage of certainty. By paying taxes now on contributions, you are assured of having a certain tax liability, whereas it is impossible to tell where tax rates will be in the future. For some persons, this provides an additional peace of mind. Of note, all contributions to an IRA are, for all intents and purposes, locked in until you reach the age of 59 1/2. Consider this carefully if you foresee needing a certain amount of liquidity in the future. Of course, the best piece of advice is to always treat your personal situation as unique. No one strategy is best for everyone. The introduction of the IRA and its related investment mechanisms has been one of the better things Congress has given us. Companies are beginning to offer a Roth 401(k), a blended version of the 401(k) and IRA. Look for more variants of these exceptional investment strategies in the future.

I ended up making a mid-week trip to Phoenix and was tied down for a couple of days. Speaking with several banks and investment houses there, it became all the more clear that banks are in serious entrenching mode to ensure they have very little exposure to insolvency. That being said, it was beautiful in Phoenix and I was far removed from any of the hurricanes or conventions, though I did tune in along with 40 million others to watch Palin deliver her speech. As a former hockey player, it's nice to see the sport get some recognition. Hehehe.

Hope everyone has a great weekend. I'll talk more about bank liquidity and whatever else happens over the weekend. This looks to be a pretty boring one in college football. Until then!