My wife called, and said she heard on the radio that it dropped 400 points in 30 minutes.
The economy is now like the Sarlacc Pit - wherever the bottom really is, I don’t think it’s going to be fun to find it.
Oct
09
2008
09
2008
Dow Falls 600 Points This Afternoon
11 Comments »
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Stocks are on sale. This is a great time for young guys like us. Buy!
Sure. It’s great if you have extra cash lying around, and the patience to wait for your ROI.
Well, the statement “the stock market is foolproof” has only ever been true over years-long periods. If you go in without the patience to wait for your ROI, it’s always been a mirror-image form of gambling — i.e., the odds are with you rather than the house, but short-term anomalies in the other direction do happen.
One more thing…
Perhaps the stock market is about where it should be.
Aww man, now we’re going to be slowly disested over… 1000 years!
I meant, digested.
Kevin,
Spend your own money. I don’t get much enjoyment out of watching it drain away. Do you somehow think that the market can’t drop another 50% in another year? My money (what little I have invested) is in T-bills. And stored food.
Remember, If you had invested long a week AFTER the stock market crash in 1929, you would have recovered your investment in …. 1952
Yeah… if you don’t count dividends.
Well, Steve is essentially correct about patience. Stocks are an investment for the long term, i.e. for retirement. If your investment horizon is ten years or less, you probably want to go into TIPS and a mix of bonds.
Danby, if you had invested steadily through the 30s you would have done fine. I’m not assuming anybody has a wad of cash sitting around to buy in all at once. But investing a little bit at a time over the long term is a great strategy in any historical period, so long as you have an asset allocation whose risk matches your goals. You start out all in stocks, and as your retirement date gets closer, you move more and more into safer investments. If you end up with a lot of money, you could finish with 50/50 stocks vs bonds, but if not, maybe 20/80 to be safer.
Guys, I really encourage you to read the book called the Boglehead’s guide to investing and give it some thought. Understanding long-term investing can really give you more peace of mind. My retirement savings have dropped just like everyone’s. They are down nearly 30% for the year. And my reaction is to smile and think about the bargains I am picking up every time I contribute to my 401k. I see headlines this morning like “Panic Selling Ripples Across Global Markets” on finance.yahoo.com, and it doesn’t bother me. In fact, I hope the panic continues and stock prices are depressed for the next ten years. Nothing could be better for my investments. Why? because I am 40 years from retirement. And if I was closer, I would have a less risky asset allocation that would allow me the same peace of mind.
Knowledge will give you peace. Look into it.
Incidentally, small-cap value stocks went on a tear today: the Russell 2000 Value Index ETF was up over four and a half percent.
It ain’t over until Businessweek puts “The Death of Equities” on its cover, though.