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I have been following my stock portfolio for 4 years now and this is there worst week ever. So far they are down 5% this week alone. That is a big drop in just four days.
I think that the stock market crash is the first of many problems that will push America and the world economy into a depression. The depression started today.
Credit crunch, debt, trade deficit, huge drop in real estate, foreclosures, lack of respect for American leadership and many other things have caused the economy to crash.
The Internet bubble, now there was a crash. 1987, ouch! A 400 point drop in the Dow now is a blip.
But where is the bubble now? What has changed? Debt and the trade deficit never caused a crash. Respect for American leadership? Clinton was an idiot, the market did great. Credit? The Fed eases up and that goes away. Drops in real estate and foreclosures? Not all over the country. Enough to momentarily affect the psychology of the market, nothing long term.
Despite 9-11, despite a comitted enemy of the US, despite a war in Iraq and Afghanistan, this market is booming.
None of you Cassandras were celebrating the economy with the Dow on it's way up...one bad day and it's a depression.
Don't panic! There is always resistance (swings) when the market reaches a new plateau. It wasn't that long ago that it was 1200 and it moved from 1300to 1400 even quicker.
The market is all about 'perception' even more so than fundamentals. What was it a month ago that mortgages began faultering and they were still pushing on tv investments that would seem contrary?
We're not about to have a run on the banks as in the depression. There are too many safeguards today. What we might get is a correction both in the market and in real estate to bring us back to reality from the extreme speculation, and that may not be a bad thing. There are ways to make money with stocks whether it goes up or it goes down. If your companies are good, hold and don't sell. They'll come back. You don't lose that way.
No one ever sees a major market crash coming - it's always a surprise to the vast majority of us.
Regarding this being a recession or depression, it matters not really whether that is the case or not - there's going to be ups and downs anyway. Summertime is historically slow for stocks in general (at least to the best of my recollection). Whatever happens, just don't react emotionally to what you see - long term investors do much better than short-term - if the market or your stocks go down, consider them "on sale" - and buy more (as long as the companies continue to be ok re: the key financial indicators) :-)
Whatever happens, just don't react emotionally to what you see - long term investors do much better than short-term - if the market or your stocks go down, consider them "on sale" - and buy more (as long as the companies continue to be ok re: the key financial indicators) :-)
Good advice. My advice to Dingler is don't check your portfolio so often. Watching day to day fluctuations can be quite misleading. I think the most important things are to stay diversified and stay in the market. Oh and as someone else said "Don't Panic".
I have been following my stock portfolio for 4 years now and this is there worst week ever. So far they are down 5% this week alone. That is a big drop in just four days.
I think that the stock market crash is the first of many problems that will push America and the world economy into a depression. The depression started today.
Credit crunch, debt, trade deficit, huge drop in real estate, foreclosures, lack of respect for American leadership and many other things have caused the economy to crash.
Watching your portfolio is a prudent thing to do. The market has been in an uptrend. While the market might move up after a correction, individual companies don't always follow the market. While some will make gains again, many others stay behind.
Intel serves as a good example here. I traded Intel frequently in the late 90's. Intel traded at $70 before the 2000 crash. It dropped to as low as $14 and has not recovered since. At today's price of $24, you would have lost about 2/3 of your money if you bought at $70 and kept holding. Intel is still a leader in the semiconductor industry and one of the best known companies in the world. Smaller and lesser known companies have done far worse.
The market is still filled with novices who think buying stocks is like buying clothes at a department store. "This stock is a bargain. It was $100 a year ago. Now it's only $20," they say enthusiastically. The stock market is not a department store.
Watch your money carefully and do what the market tells you do.
"The sky is falling" Common people. It is the market it gets it ups and down. Few days are the downs. If you expect it to always go up, then you are are looking for something that does not exists.
Overall, overtime, it should go up - but day to day ops will change.
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