i've gotten hammered the past 2 months, but buying opportunities abound soon enough. it's almost time to get back in the game.
I wouldnt be buying anything until this hideous bill gets signed. Uncertainty leads to panic selling. Stocks will be driven to new lows over the next three days as retail investors stop loss orders get taken out.
If you've been buying, even if you haven't been buying at the lowest of the low, you've still been buying in the downslope. In the long run, you'll think you were a genious.
I think people need to understand WHY stocks go up and down before getting into the stock market. You can have the BEST PERFORMING stock, and it can still be very underpriced. When institutional investors buy in large quantities, stocks go up. When they sell off stocks in massive quantities, they go down. It's all about supply and demand in the most basic format. This is why when you see a large buyback from a company, or a large amount of investment into a stock, that stock usually shoots up, even when there's not really any new information regarding that stock. Also, when a stock is heavily shorted, it will go down even further unless something positive is printed in the news. Now I can answer the question of "when" to buy stocks. You may be thinking that a sector of stocks, or a particular stock will go up in a few months because they've just been so "low" and that's what happened historically. However, history means jack **** if something like this has never happened before, or maybe even in the stock market in general. The truth is, NOBODY knows what's going to happen. The only way for stocks to go back up is when people (especially institutional investors w/ large sums of money) believe that they can safely go back into the market and will make a profit. We will then see a boom due to more money being in the stock market. If you are aggressive, you may want to buy some stocks right now and keep buying if it goes down. The reason is that the stock market has been down around 22% this year and it will go back up sometime in the future for sure, just don't know when. If you keep buying, you'll lock in even more profits as stocks eventually go up. If you're not aggressive at all and volatility gives almost gives you a heart attack, then I'd just sell off some stocks and put it into a CD (less than $100,000) or bonds. This way, you're not waiting too long and have a peace of mind. As for myself, I'm holding onto all my stocks and I'm going to keep buying a set limit every month. Dollar Cost Averaging. So, to make this short, there is absolutely no perfect time to get back in. It just depends on how aggressive you are when you invest.
luckily the building i work in is only 2 stories. b/c aapl, v, and ma are destroying me. apparently buying high multiple stocks right before the biggest financial crisis since the great depression isn't good. also, investing in these companies that make lots of money and are highly successful is also a bad idea. i swear apple could sell 50 million iphones per day and the stock would plummet if the profit margin dipped a percent or two. no stock gets destroyed by good news more than apple.
that's what i thought friday. thank God i sold some of those options i bought on friday before the market closed instead of waiting for the bailout to send them up. of course i did buy some aapl options this morning after it was already down 12 on the morgan stanley downgrade b/c i figured the bailout had to pass. needless to say i made a bad day worse. doesn't the fed have to lower the rates now? and doesn't congress have to see the error of their ways and do something? of course, this is congress and today taught me you can never overestimate their ability to be partisan bastards even if the face of a crisis and even if they do something, it'll probably just make the market go up from whatever horrible level it falls to over the next few days. should i be buying short or ultra short dow/nasdaq/s&p etf's? i mean it has to get worse from here doesn't it?
No offense, but this is some downright bad and empty advice. Dollar Cost Averaging is old classical theory and has lots of pitfalls and should be used only in the right circumstances. It's better to always examine every position as a state function and see where to go from there. Also, someone asked if if felt like the market is oversold. Yes, in the sense that the knee-jerk reaction by the market to the bailout is just that. There of course will be a new rewritten plan that is signed soon enough. However, take a look at consumer spending, consumer credit and you will see that we are at decade lows. Wait for this impact to continue to ripple even harder through more companies' bottom line and you will see we are not oversold at all. Finally, to reinforce someone else's comment - Thursday is going to be a horrible day. You might see some money coming in before then and can take some chances but the lift on short sale ban is going to drive this market down hard. And just a shameless woot to myself - I was reading CPST chart all last few days and couldn't help but buy some at 1.16. Honestly, a crazy, maybe even gambling move but everything was pointing the right way to me. Closed at 1.31 and one of only couple hundred stocks to end green today.
actually, after more research, i learned all is not lost for wachovia. it sold all it's banking operations to citi, but the brokerage and securities branch is still intact. this branch is still very large. also, most of her debts were are sold (along with the assets) so it's not looking too bad.
This is why I said "As for myself...". I have most of my investments as index funds that follow the total stock market. I mentioned dollar cost averaging as what I'm doing myself. I'd rather take the average than to beat the market. Sure, money managers may beat the market a few times, but on average more than 90% of fund managers don't beat the market. Dollar cost averaging may not be the way to go for a single stock, but for a group of stocks or index funds, it may be the best way to invest for people that don't have time to follow stocks every day or week. We may have different opinions and theories, but I wouldn't call dollar cost averaging "downright bad and empty advice".
We need to have a very big bounce tomorrow -- which means this bill must pass and the market must respond in a big, big way. If that doesn't happen, especially if we get a weak bounce in response, I have just one small piece of advice: SELL EVERYTHING. IMMEDIATELY.
the bill passing doesn't fix the major issues. it is a start but there is a ton more they need to address.
Agreed ... we're in for a nasty recession whether the bill passes or not. Just saying that if the markets don't respond well to the bill passing, what happened on Monday will be child's play compared to what happens next week. Expect at least a 10% drop in the major indexes.
