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Of all the people, the "our troops are there to protect your economic freedom" novice had to respond. This is like Sarah Palin participating in a serious debate.
From the 1929 losses, it took until 1955 to get back to the same level, in nominal (not inflation-adjusted) values.
When accounting for reinvested dividends, you would have been back to even in under 15 years. Still a long time, granted...
People like to ignore dividends when talking historical market returns, for some reason, even though dividends are part of the return and have a direct negative effect on the stock price itself.
When accounting for reinvested dividends, you would have been back to even in under 15 years. Still a long time, granted...
People like to ignore dividends when talking historical market returns, for some reason, even though dividends are part of the return and have a direct negative effect on the stock price itself.
LongArm, good point! I haven't paid attention to dividends because I have been more concerned with short-term appreciation. You should be happy to know that the above article does take that into account. This article is good a read because, in light of this decline, there are interesting and sobering realities about a lot of things such as the "buy and hold" approach and the return of bonds in the long term.
What everyone is saying is correct. It is very difficult for the novice investor to judge stock value right now. A massive selloff has little to do with stock value - it is all about the wallet. It is actually very sad to watch what is happening. So many people are losing money needlessly - they should just let it ride. History has proved that the market will rebound.
Not for every company. Those that were over leveraged need to purge.
Those with good fundamentals and a sound balance sheet will survive the storm. I'm watching and will buy what I think are some good solid companies when the massive selloff is over and done with.
Beware of the odd dead cat bounce bull runs though..until they SOLVE the credit problem there is no reason to jump back in.
LongArm, good point! I haven't paid attention to dividends because I have been more concerned with short-term appreciation. You should be happy to know that the above article does take that into account. This article is good a read because, in light of this decline, there are interesting and sobering realities about a lot of things such as the "buy and hold" approach and the return of bonds in the long term.
The price of the stock is adjusted for dividends on ex-dividend date.
The price of the stock goes down by the dividend amount.
. If you buy it at $5 today, how much will you be able to sell it for a week from now?
^^^ This is where you're not seeing the investors' point of view. I have no idea where it will be in a week or a month, but historically, this is a good time to buy. Next week or month is also a good time to buy if the price goes down more. The average purchase price will be lowered and my 'investment' will hopefully create a long term appreciation.
or one could lose a whole lot, but "under the mattress" is not the answer. No matter how good it feels right now.
But if you buy at a high price and sale at a low price then you have loss There are always losers and winners in the stock market;just like any risk you take. look at small busienesss that has abpout a 90% failure rate in the first years. and don't want to be in the stock market. Just because you sell the stock for $5.00 doesn't mean that it will not gain value in the future. Watch what happens when the financials strighten out. People are going to buy certain stocks because they have a history of making money in a stable time. Those that don't want or can't handle risk should by all means stay out of the markets.
It goes up, it goes down --- chill folks, this is not the end of the world. This is a great time for bargin shopping. IF you have 10/15 plus years to redemption, its buy low time. Smile, enjoy the ride. If your in retirement and need current income from your investments ---- caution is advised.
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