Managing School Money in a Down Market

By Charles K. Trainor

The Dow Jones Industrial Average is one of several indices used to measure the behavior of stock markets. Each trading day the average is derived from the dollar price of 30 large, widely held public companies. It is expressed in points rather than dollars. An increase in the Dow suggests an improved market.

On Oct. 12, 2007, the Dow rose to 14,000, an all-time high. Many investors were convinced that stocks would continue to increase in value and the Dow would soon reach 15,000. Unfortunately, that was not the case.

Over the past several months we have witnessed financial systems around the world lurching from crisis to crisis. U.S. financial institutions reported more than $635 billion in losses due to mortgage-related investments. Worldwide losses are estimated to exceed $28 trillion.

The consequences of this crisis will impact school districts across our country for years.

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