It may be money for a new home, the kids' college education fund or mom and dad's retirement plans. A big chunk of those precious family savings has ebbed away with the declining stock market in recent weeks.
With the Dow Jones industrial average down 512 points Monday, millions of Americans may well be sitting around kitchen tables debating what to do: Should they sit tight or cash out?In the past, the quick and easy answer was to stand pat and stay in the market for the long haul. Investment advisers pointed to heavy tax bills when stock is sold and the costs of getting back into the market later when they advised hanging in.
But these days, that one-size-fits-all answer may no longer apply, many analysts say.
``You need to ask yourself, what was my initial goal and how soon do I need the money?' said Robert Weagley, associate professor of consumer and family economics at the University of Missouri-Columbia.
For those planning to retire or to spend the money in the next four or five years, the bull market has already produced spectacular returns that exceeded investors' expectations a few years ago.
So ``they can divest themselves from the stock market and reallocate to more secure investments,' Weagley said.
But for families with no urgent needs or immediate plans, the old advice may still hold.
``For someone who's planning to spend the money down the road, 10 or 20 years from now, it's easier to ... let the money sit there,' Weagley said.
``I have to believe that over the next two decades the ... stock market will be the best place for your money.'
Arnold Spitzen, an independent financial consultant in Silver Spring, Md., said people should hang on to their stocks so long as the reasons they bought them are still valid, such as the intrinsic value of the company.
``I'm not just blindly saying let's hold it and hide our head in the sand,' Spitzen said.
``But the only thing that has changed is the price. And while that is important, if the fundamentals of the stock haven't changed, then people should wade out these bumps.'
At the moment though, hanging in is hard to do.
As Richard Curtin, director of consumer surveys at the University of Michigan, put it: ``The whole idea of the market phenomenon is that it does throw reasoned opinion to the wind.
``It's hard to remain a believer of the view that you should invest in the long run, but any reasonable assessment will show that that still holds true.'
Already, consumers have been rattled by ongoing tremors from Asia's embattled economies and fears that the rising trade deficit will chill the domestic economy.
Consumer confidence fell for the fourth consecutive month in August, according to Curtin's Index of Consumer Sentiment, which was released Monday. Although the monthly losses have been small, the cumulative decline has been sufficient to reverse all the gains recorded since last August, Curtin said.
For all investors, Curtin said, the past few days of trading have led to a ``real money loss. It's not simply psychological.'
The effects of those losses will hit the rich first.
``What you'll see is a tempering of spending among the wealthiest on luxury goods of all sorts, from expensive clothing and jewels to vacations and luxury cars,' Curtin said.
Middle- and lower-income families will soon follow in pulling back on spending as they worry about job and income prospects if skittish companies decide to retreat from new capital investments, therefore creating fewer jobs.
``These things can trickle down and lead to a dampening of the economy,' Weagley said.
Continued global political and economic uncertainty is likely to aggravate those fears.
``Our own economy looks pretty good, but what we don't really know is how vulnerable corporate earnings are to the trouble overseas,' Weagley said.
Though unpleasant, economists say, this was well anticipated.
``This is a healthy dose of reality,' Weagley said. ``A lot of people thought you could throw a dart at a mutual fund board and you couldn't lose money.
``Now they know that you can't hide from market risk.'
It's also been an overdue education.
Said Curtin: ``Consumers are finally making a direct connection between the changes in the international economy and their own personal economic situation.'