The stimulus plan will start working in a few months, and continue to work over a few years. But it will not reverse or even stabilize the loss of jobs and homes, because a 800 billion dollar plan cannot plug a 2000+ billion dollar hole. Over the next one to two years, unemployment will increase less than it would without a plan, but it will increase. In 2010, Republican candidates for Congress will ask the nation: Are you better or worse off than you were two years ago? And the truthful answer will be "no". All because Obama is hell-bent to be a uniter, not a divider, and because Democratic centrists in Congress won't let their party be Democrats.
I don't know how the stimulus will affect the stop market, because a growing economy pushes the stock market both ways: By making investors expect higher profits, it pushes the stock market up. On the other hand, by making investors expect higher interest rates, it pushes the stock market down. The direction and size of the over all effect can vary from case to case. In this case, I'm guessing
the profit effect dominates.
I lost seven percent of my nest egg in the crash. It could have been much worse. But luckily, I withdrew 80% of it from the stock market in summer 2007, and moved it into fixed deposit accounts.
I think the best strategy moving forward is an aggressive Keynesian stimulus plan, three times greater than the one Congress just passed, and much more focused on government spending rather than tax cuts. Because only the left wing of the Democratic party supports it, the best available strategy will never be tried, and moderate Democrats will lose the midterm elections to radical Republicans. It's depressing, but I think that's how it's going to be.