Dow down nearly 700 points

[dcnativenerd]

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/01/AR2008120101051.html?hpid=topnews

I just saw an NBC Special Report on it.

Oh, this can't be good.

[rdsknbill]

It's Okay. This is an adjustment (or so the financial "experts" say)

[techboy]

If this is bad, does that mean last week was fantastic?

Stop watching short term market moves. They are meaningless.

[Predicto]

It's going to be volatile for a while. Just ride it out.

[JetSkins]

they officially announced we have been in a recession

...shocking

[dcnativenerd]

Yeah, no kidding. But, it's OFFICIAL now!

Hurray.

[RyansRangers]

It's Okay. This is an adjustment (or so the financial "experts" say)

I love how they come up with words to make it sound better these so called (experts). like these so called adjustments and stagflation

[Corcaigh]

Today it will be a "necessary correction". But tomorrow it will be "buying opportunity" for "undervalued" stocks.

These pundits are less useful than a Magic 8-ball.

[RyansRangers]

Today it will be a "necessary correction". But tomorrow it will be "buying opportunity" for "undervalued" stocks.

These pundits are less useful than a Magic 8-ball.

LOL:applause:

[jbooma]

they officially announced we have been in a recession

...shocking

bingo

which i think i dated correctly in all these threads see all you had to do was ask me lolol

[modazfuk]

Last weeks surge was because big money traders were on vacation hence the low volume in the markets. The markets will probably roar again right before Christmas through the end of the year for the same reason.

[Prosperity]

If this is bad, does that mean last week was fantastic?

Stop watching short term market moves. They are meaningless.

in the long run we are all dead

[techboy]

in the long run we are all dead

Ah, Keynes. I like this one from his General Theory:

"We have not proved able to take much advantage of a general systematic movement out of and into ordinary shares as a whole at different phases of the trade cycle....As a result of those experiences I am clear that the idea of wholesale shifts is for various reasons impracticable and indeed undesirable. Most of those who attempt it sell too late and buy too late, and do both too often, incurring heavy expenses and developing too unsettled and speculative a state of mind, which, if it is widespread, has besides the grave social disadvantages of aggravating the scale of fluctuations.

Can't time the market. It's pointless to try. Might as well just ride it out.

Long term (not the really long term Keynes was talking about), the market trends up and these one day swings become noise on the charts, most of the time not even visible.

[Prosperity]

Can't time the market. It's pointless to try. Might as well just ride it out.

Long term (not the really long term Keynes was talking about), the market trends up and these one day swings become noise on the charts, most of the time not even visible.

I don't doubt it, but still, it's down what... 42% in a year? I mean yeah a year is reasonably a short time frame. But how long do you ride it out a year? two? three? ten? Whether or not the time needed to wait is beneficial depends on when you need the money. I mean if you told a guy in August 2001 to ride it out and think long term 7 years later he would still be screwed today, and in that case timing would be pretty damn important. And while these day to day drops may be insignificant, it's been trending down for 6 months now.

Overall you are probably right, think long term enough and problems will go away, unless something catastrophic happens anyway.

Aside from that, the volatility should be worrisome because it probably reflects troubling times elsewhere, right now, regardless of longterm investments,

[techboy]

I don't doubt it

Good.

, but still,

No buts, mister.

it's down what... 42% in a year? I mean yeah a year is reasonably a short time frame. But how long do you ride it out a year? two? three? ten?

More like thirty.

Whether or not the time needed to wait is beneficial depends on when you need the money. I mean if you told a guy in August 2001 to ride it out and think long term 7 years later he would still be screwed today, and in that case timing would be pretty damn important. And while these day to day drops may be insignificant, it's been trending down for 6 months now.

Absolutely. Any money needed in less than 10 years should not be in stocks. Asset Allocation is key.

Overall you are probably right, think long term enough and problems will go away, unless something catastrophic happens anyway.

Right. Of course, if there's a total cataclysmic meltdown of the economic system (which is the only way stocks don't work in the long term), it won't help much to hold bonds instead.

Aside from that, the volatility should be worrisome because it probably reflects troubling times elsewhere, right now, regardless of longterm investments,

Actually, I find it far more likely that it reflects the panicky reaction of a bunch of lemmings. I think there are far better indicators of economic well-being than the market (short-term), such as the reports they keep reacting to.

I mean, last week, the market was up 5 consecutive days for a jump of over 10%. Are we supposed to have concluded that things were better then?

[Ignatius J.]

Someone who put their money in 2001 with a seven year time horizon would be sitting pretty. I mean, assuming that he slowly moved assets out of stocks and into bonds over that horizon, he would have timed the market perfectly. Not that we advocate market timing.

[endzone_dave]

Last week was a suckers rally. The dow could easily go down to 7000 by the end of the year. Heck, by the end of the week.

[Fergasun]

I-J,

Someone who put their money in 7 years ago would *not* be sitting pretty. The Dow is nearly the same level as when they put their money in.

Buy and hold might have worked 20 years ago, but I think it is a dead strategy now. What will happen when people start to withdraw their 401k money? Won't that put downward pressure on stock prices? It's like the saying goes, "You are fighting the last war...".

To be honest this volatility bodes very poorly for stocks going forward... as the last times stocks dropped this much in one day was December of 1929. We are in a period of deflation where every asset class is getting hit with price drops due to the massive credit destruction. I know people are loathe to even think of another global depression, but my question is what is gonna hold that back?

Our country is going all Zimbabwe in order to avoid this deflation, but *it's not working*. Now I'm not saying this things will for sure happen... but we'll find out soon enough. Interesting times to be alive, that's for sure...

[jbooma]

I-J,

Someone who put their money in 7 years ago would *not* be sitting pretty. The Dow is nearly the same level as when they put their money in.

Buy and hold might have worked 20 years ago, but I think it is a dead strategy now. What will happen when people start to withdraw their 401k money? Won't that put downward pressure on stock prices? It's like the saying goes, "You are fighting the last war...".

To be honest this volatility bodes very poorly for stocks going forward... as the last times stocks dropped this much in one day was December of 1929. We are in a period of deflation where every asset class is getting hit with price drops due to the massive credit destruction. I know people are loathe to even think of another global depression, but my question is what is gonna hold that back?

Our country is going all Zimbabwe in order to avoid this deflation, but *it's not working*. Now I'm not saying this things will for sure happen... but we'll find out soon enough. Interesting times to be alive, that's for sure...

What a lot of people do not understand though is if you were planning on retire lets say next year then any good financial advisor may have you started pulling money into more conservative options. The problem is a lot of people feel they know about money and finance when they have no clue. Just because you can get information on the web and learn about it does not make you an expert.

Many of us who will continue to still invest in the market will have more buying power and stocks in the long run. Lets say in 3 years the market is back to what it was on Jan 1st 2008, then those that stayed in it will actually have more value then that same time.

[Toe Jam]

I don't care anymore.

Whatever will be will be.

[Fergasun]

jbooma,

But you lose money if you keep it in the market as it goes from 12k to 8k.

I'm talking that everyone who is gonna retire in 10-15 years has their money in stock. If they are going to use that money and spend it for their retirement, won't that put selling pressure on stocks and cause prices to go down? I say... yes it does.

[jbooma]

jbooma,

But you lose money if you keep it in the market as it goes from 12k to 8k.

I'm talking that everyone who is gonna retire in 10-15 years has their money in stock. If they are going to use that money and spend it for their retirement, won't that put selling pressure on stocks and cause prices to go down? I say... yes it does.

how do you lose something that has never been cashed out??? these are all unrealized gains, stocks mean NOTHING until you cash out

if you are retiring in 10-15 years you are making a knee jerk reaction and in time many others will be sitting a lot prettier then you

[WVUforREDSKINS]

Wouldn't that be an absolute horrible decision to have everything in stocks?

"Many of us who will continue to still invest in the market will have more buying power and stocks in the long run. Lets say in 3 years the market is back to what it was on Jan 1st 2008, then those that stayed in it will actually have more value then that same time."

And Jbooma, can you explain to a dummy like me how those who stay in will have more money than before if the dow goes back up to what it was jan 1st? How would they not just get their money back? Or I guess I should say the value of what there stocks are worth.

[jbooma]

Wouldn't that be an absolute horrible decision to have everything in stocks?

"Many of us who will continue to still invest in the market will have more buying power and stocks in the long run. Lets say in 3 years the market is back to what it was on Jan 1st 2008, then those that stayed in it will actually have more value then that same time."

And Jbooma, can you explain to a dummy like me how those who stay in will have more money than before if the dow goes back up to what it was jan 1st? How would they not just get their money back?

you would have actually more # of stocks, remember right now the prices are so low you are getting more shares then you had before, just because the market will be at lets say 12K if you have more shares of that same company then you had before it went down then your value would be greater

prices are down, but you are accumlating more shares then you had before

your not a dummy

like i said earlier the good fund managers are earning that money as we speak

[WVUforREDSKINS]

you would have actually more # of stocks, remember right now the prices are so low you are getting more shares then you had before, just because the market will be at lets say 12K if you have more shares of that same company then you had before it went down then your value would be greater

prices are down, but you are accumlating more shares then you had before

your not a dummy

like i said earlier the good fund managers are earning that money as we speak

OK never been in the stock market and trying to understand it. Are you saying that because the prices are so low people actually get more shares or its smart to buy more shares? Im not sure I follow you. Can you actually accumulate more shares without buying them?

OK for example let's take Citi group whose stocks have dropped over 200% a share. If you had say 150 shares and at $40 (just for sake of argument) and now they are going for $10 a share. You still have 150 shares at worth $10 right?

If you can learn the market, you can be set for life. However, no one can learn the market. I wish I had learned this stuff in school. Jbooma you and tech seem to know the market pretty well on this board, or at least some of the more knowledgeable about it.