The question everyone is asking, not just shell-shocked investors, but financial advisers and economists as well, is how low can the Dow Jones Industrial Average go? And the answer is, very, very low. Some pessimists are now predicting the Dow 900.

"We are going to have a very, very tough economic period that is going to last for a long time," said Curtis Arledge, managing director and portfolio manager with BlackRock's fixed income, portfolio management group. As far as the volatility and the sharp daily declines in the Dow are concerned, "the equity market is in the hands of short-term traders, forced liquidation in levered funds" and margin calls, said Andrew W. Lo, founder and chief scientific officer of AlphaSimplex Group, and portfolio manager of the ASG Global Alternatives Fund.

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