About 2 years ago, the index was stable around 10,000. Today, right now, the Dow has lost 76 points! With the total being 7626.33. This is depressing, why the hell are we losing so much money? Will there be social security and an economy when I am older? AHHHH!
we're bottoming out...that's my take...i think we're there, or relatively close...within a few hundred points... the rate of foreclosures is the highest it has ever been...good for my business, bad for the economy at large.
I think we are no where near bottom. As mush as the market has lost, the stock valuations have not fallen as fast as corporate earnings. I do not see valuations firming up until corporate earning are once again strong. Remember that a balanced portfolio is the winner in the long term. A balance portfolio has domestic and foriegn stocks (preferably index funds), domestic and foriegn bonds (preferably held individually or in an investment trust until maturation), money market funds, real estate, and gold.
I hope that the market goes lower! I'm putting money into my 401K every month so I hope that I can buy when the share prices are low. I'm reasonably confident that prices will go up in 30 years when I start withdrawing for my retirement.
I strongly disagree. October through December are typically very strong months for stocks. The current devalution we are seeing could be part of September being the WORST stock month. I think that October will see a rebound for the market...starting mid month. There are many stocks which are currently trading at 6 times earnings...while the price of stocks ideally hovers around 25 to 29 times earnings. My prediction is that while we are celebrating on New Year's Eve, the market will be sitting between 8500 and 9000...and on its way back up.
I'll hold you to that. Personally, I feel the bottom of this Bear market will be around 5800-5900, and that will occur in Spring of 2003.
That may be what happens, although I doubt it. There are too many fund managers that are starting to feel bullish again for it to drop that low IMO. But there are scores of people out there who know better than I do.
I think we are near the bottom, but hey I'm in it for the long run so to me this is just a big sale to take advantage of!
Going to the S&P web page: http://www.spglobal.com/indexmain500_data.html you will see that on August 30th, 2002 the SP500 PE Ratio is listed at 37.09. The historic norm is about 15. You can easily see that returning to the norm the SP500 would drop to about 370 (since the SP500 was ~916 on 8/30/02 and (15/37)*916=371). P/E isn't the only valuation for stocks. I am only using as a single data point, to indicate that a precipitous fall is not out of the question. There is no rule that the P/E has to return to its historic norm. Valuations could stay this high for the rest of out lives. Who is to say with certainity. Not I. But with these type of valuations the risk of stock owernship may not reward the return.
I doubt it, and not just because you are Refman. I still say any system this complex, (with literally hundreds of variables, many interdependent), cannot be reasonably prognosticated. Someone will end up being "right," but really I say they will simply be entirely lucky. Speaking of numbers of variables, does anyone have any data on total # of individual shareholders versus time, on a scale of, say, the last 100 years? That may sound stupid, but I keep thinking the markets became more volatile with the advent of every Tom, Dick, and Jane buying stock, often without advice. But I have no idea about the historical trend, in terms of month-to-month volatility or total # of people trading.
Beware: Responding to more than one poster here. You make a good point, but I still feel this is a bad indicator. It comes from the S&P 500, which is a very small portion of the larger DJIA...which is what most people are concerned with. Personally I've never been a huge fan of the S&P. I think many times it underperforms the big board...but that's just observation, and not really detailed observation. Maybe I should head up the Fed. LOL Anyway...thanks for the vote of confidence. Outstanding point. Compounding that is the fact that at this point the VAST, OVERWHELMING MAJORITY of Americans have their retirement invested in the market. This is a result of FASB changing the accounting for pensions about 15 years ago and subsequently companies not offering pensions anymore. Enter the 401(k).
