Earlier today I looked online to see how the market was doing. The DOW was down over 200 points, NASDAQ was down slightly. I just looked a minute ago, and the DOW was up over 700 and NASDAQ over 400. No matter what happens today I still will down significantly since last year, and I just do not understand the flucuations that seem to be occurring with increased frequency. But if it has to be crazy, crazy like today is just fine with me.
The stock market is insane
- Thread starter vito
- Start date
JPGLSG1234
Blackhawk
Hey that instant computer trading ain't all bad, you can make 2 to 2.5% at least once a week on at least 50% of your holdings. All you have to do is just watch it, you'll see the trends, follow the trends. I'm one of their Huckleberries, I hope it gets more insane.
The stock market isn't something I watch frequently. I rely on trend data. You will drive yourself crazy if you react to everyday hiccups.
protoolman
Service-Sixer
Well my retirement money is down 20% over last year through Thrivent and their " experts" . My play money for day trading myself through Robinhood is a different story. If I remember right at the beginning of COVID I invested 6500 dollars in big companies that were down like 75% that I figured would come back a lot when they could get back to work. In 18 months my thoughts on that were realized with the value of my stocks tripling . I needed a new car so I bought a new Subaru Crosstrek. In the end with tax licensing and an extended warranty I paid less than 10,000 for the car after cashing out with Robinhood.
I know this thread was from yesterday. The news I read, the stock market was up yesterday was due to the Fed coming out and stating the interest rate hike would be smaller than expected.
Today, the stock market is down because the jobs report coming out tomorrow looks grim. Perhaps not grim, but worse than expected. The headline I saw stated: "Investors brace for dismal jobs report." I thought that was funny to think of people bracing themselves against something because of the report. Just a funny way to say something I guess.
My account is down. Luckily last Fall and earlier this year we slowly switched from stocks to real estate. Not entirely, but a better mix at least. Hopefully the stock market will come back sooner rather than later.
I know your friend was just trying to make fun of the situation, but that just isn't the case. It's not difficult to earn a decent return in the stock market. It isn't a get rich quick scheme, but slow and steady does indeed win the race.
Today, the stock market is down because the jobs report coming out tomorrow looks grim. Perhaps not grim, but worse than expected. The headline I saw stated: "Investors brace for dismal jobs report." I thought that was funny to think of people bracing themselves against something because of the report. Just a funny way to say something I guess.
My account is down. Luckily last Fall and earlier this year we slowly switched from stocks to real estate. Not entirely, but a better mix at least. Hopefully the stock market will come back sooner rather than later.
The lame-duck Congress will be jamming through a lot of legislation this month. Keep an eye on what the Senators and Representatives are investing in, and do the same thing.
beentheredone
Single-Sixer
When buying stocks by throwing darts at the stock report page of a newspaper has been proven time and again to perform as well, and often better, than the best professionally-managed portfolios, I say it's Wall Street or Vegas -- take yer pick...
For those interested, many banks and investment banks are warning of a second decline in the stock markets - a so-called Dead Cat Bounce:
There is a finance tool called the Capital Asset Pricing Model (CAPM). Its postulate is that stock values are a multiple (CAPM multiplier) of the company's cash flow before interest expenses and income taxes are paid (corporate finance guys call this "free cash flow") - a much more mathematically driven approach to valuing stock prices than the traditional Earnings Per Share multiple (EPS multiplier).
Anyway, the dilemma is that companies' net incomes (essentially their cash flows AFTER paying all debt interest expense and income taxes) are being threatened by a combination of (a) high (highest in 10+ years), and continually escalating, debt interest rates and (b) the Howdy Doody Dummy Administration's threat to increase federal income tax rates on corporate earnings. Each of these two drags on earnings will hammer stock prices - not because of frailties in CAPM or EPS valuation techniques themselves - but because the market will be compelled to reduce the multipliers (both CAPM and EPS) to take account of the higher expected debt costs and income taxes.
This may well result in something that stock market professionals call a Dead Cat Bounce - a second freefall in stock market prices that follows a "false positive" (i.e. premature and thus unwarranted) uptick in the markets. Those professionals assert that the most recent three months' positive stock performance is such a Dead Cat Bounce, and it will be followed by another stock market decline.
Indeed, more and more banks and investment bankers are warning of recession in 2023, triggered by the falling domino effect of, in order, 1. companies' lower reported earnings, 2. then by employee firings that result from those dismal earnings, 3. then by retail sales declines caused by fewer people having spending money, 4. then by retailers' employee firings that result from lower retail sales, 5. then by lower manufacturers' sales caused by lower retailer goods purchases, and 6. then by manufacturers' employee firings that result from lower manufacturers' sales. And then rince and repeat - the cycle repeats itself.
The many high-tech companies' recently announced layoffs, and on-line companies' announcements of reduced ad spending are collectively early harbingers that the dominoes may have started falling. The next signs will include the finally determined Holiday season sales (and how much of those sales were made at deeper than normal discounts), companies' December quarter-end earnings releases, and corporate announcement that they are being forced to refinance their existing (low interest rate) debt instrument with much higher interest rate debt.
Stay tuned. The time during which those events may occur is rapidly approaching.
I personally don't trust cats, so my money is in 4.5% T-bills right now.
There is a finance tool called the Capital Asset Pricing Model (CAPM). Its postulate is that stock values are a multiple (CAPM multiplier) of the company's cash flow before interest expenses and income taxes are paid (corporate finance guys call this "free cash flow") - a much more mathematically driven approach to valuing stock prices than the traditional Earnings Per Share multiple (EPS multiplier).
Anyway, the dilemma is that companies' net incomes (essentially their cash flows AFTER paying all debt interest expense and income taxes) are being threatened by a combination of (a) high (highest in 10+ years), and continually escalating, debt interest rates and (b) the Howdy Doody Dummy Administration's threat to increase federal income tax rates on corporate earnings. Each of these two drags on earnings will hammer stock prices - not because of frailties in CAPM or EPS valuation techniques themselves - but because the market will be compelled to reduce the multipliers (both CAPM and EPS) to take account of the higher expected debt costs and income taxes.
This may well result in something that stock market professionals call a Dead Cat Bounce - a second freefall in stock market prices that follows a "false positive" (i.e. premature and thus unwarranted) uptick in the markets. Those professionals assert that the most recent three months' positive stock performance is such a Dead Cat Bounce, and it will be followed by another stock market decline.
Indeed, more and more banks and investment bankers are warning of recession in 2023, triggered by the falling domino effect of, in order, 1. companies' lower reported earnings, 2. then by employee firings that result from those dismal earnings, 3. then by retail sales declines caused by fewer people having spending money, 4. then by retailers' employee firings that result from lower retail sales, 5. then by lower manufacturers' sales caused by lower retailer goods purchases, and 6. then by manufacturers' employee firings that result from lower manufacturers' sales. And then rince and repeat - the cycle repeats itself.
The many high-tech companies' recently announced layoffs, and on-line companies' announcements of reduced ad spending are collectively early harbingers that the dominoes may have started falling. The next signs will include the finally determined Holiday season sales (and how much of those sales were made at deeper than normal discounts), companies' December quarter-end earnings releases, and corporate announcement that they are being forced to refinance their existing (low interest rate) debt instrument with much higher interest rate debt.
Stay tuned. The time during which those events may occur is rapidly approaching.
I personally don't trust cats, so my money is in 4.5% T-bills right now.
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Through a combination of advisor advise, my own thoughts, and a bit of luck I moved my funds into guaranteed rate stuff back before the last big hit.
Only own a few stocks ( John Deere and Toro ) right now, and they have done well through pretty much anything for years. I'm not keeping up with inflation with the guaranteed rates but avoided the 20 plus percent hit many funds took and for now I'm staying there.
Ignoring my many requests to deal with her stuff my wife didn't and it cost her a lot of money ( for us anyway ). She rode it out and is making some of the loss back but is now set up so she can move stuff quickly if the forecasted ugliness actually starts to happen. As mad at herself as she was for
letting that happen last time I know she won't get lazy again.
My thoughts are to get set up so you're able to move your investments into something relatively safer and if/when things start to go wrong
do it....don't just sit around watching your money burn and complain about it later. You could end up being wrong but at least you made
an effort.
Only own a few stocks ( John Deere and Toro ) right now, and they have done well through pretty much anything for years. I'm not keeping up with inflation with the guaranteed rates but avoided the 20 plus percent hit many funds took and for now I'm staying there.
Ignoring my many requests to deal with her stuff my wife didn't and it cost her a lot of money ( for us anyway ). She rode it out and is making some of the loss back but is now set up so she can move stuff quickly if the forecasted ugliness actually starts to happen. As mad at herself as she was for
letting that happen last time I know she won't get lazy again.
My thoughts are to get set up so you're able to move your investments into something relatively safer and if/when things start to go wrong
do it....don't just sit around watching your money burn and complain about it later. You could end up being wrong but at least you made
an effort.
timnc
Single-Sixer
AT least in Vegas you know the odds.
cowboycopus
Single-Sixer
Silver is UP big!
In 2007/08 recession, I lost $75K in stock value. It took almost 10 years for that value to come back. Now, lost the same amount, and want to retire next year. I guess I’ll be holding off for a while until it gets better.
It’s called Dollar Cost Averaging. If you put say $100 in the stock market every month, it will, and does even everything out in the end.
This method works. My wife and I have done it for years and even though right now we are down on paper, we are still way, way up. Since we don’t need the money immediately, we haven’t lost anything.
JackBull
Hunter
JackBull
Hunter
0.68% over last year.
JackBull
Hunter
Long ago, I got sound advice from my Great Aunt, a successful investor whose money eventually got to me when my mother died. I also read the same advice from Motley Fool and Richard Young. Buy and hold, especially dividend-paying stocks is the way I sleep well at night. It's worked out ok for me.
And remember that even if you stick money in safe non-stock places, inflation can eat up its value. You preserve capital, but lose buying power.
For a while, I played stocks a little with 'fun money' (money after investing in work-matched 401k and dividend stocks). But I was not good at it, mostly because I did not put in the time to do continual research and monitoring. And then you have to track lots more stuff and do extra work on taxes, which I hate doing.
It might be getting near time to do some value investing as stocks wobble around, but it won't be much money and it won't be daily buy-sell.
And remember that even if you stick money in safe non-stock places, inflation can eat up its value. You preserve capital, but lose buying power.
For a while, I played stocks a little with 'fun money' (money after investing in work-matched 401k and dividend stocks). But I was not good at it, mostly because I did not put in the time to do continual research and monitoring. And then you have to track lots more stuff and do extra work on taxes, which I hate doing.
It might be getting near time to do some value investing as stocks wobble around, but it won't be much money and it won't be daily buy-sell.
Much better than a 20% stock market hit in the last 12 months
Yes, Reno and Vegas are proof of that!!
JackBull
Hunter
Of course if you are going to cherry pick the dates one can make almost any investment look good. The people I know that are well-off did so by investing WISELY in the market. That includes myself.
JackBull
Hunter
It sounds like you did not know how to invest or let losers tell you not to invest in the market. I am living proof the market is easy and profitable. The trick is you do not need to beat the market, just go along for the ride. And all you need is 2-3 funds to do so. Easy as pie.
JackBull
Hunter
I pretty much agree with this. Still debating the value of dividend funds vs a total market etf. I follow the Boogleheads, the advice is free but invaluable.
Do you have a link? I’ve never heard of them before.
I read the news and occasionally listen to that smart a** from MadMoney.
Before this year, some of my stocks were up by giant amounts. They still are.
The trouble with selling is you take the hit, and still have to pay taxes on the rest.
To heck with that, I’ll just stick it out, haven’t lost anything and only have to pay taxes on the dividends.
Ka6otm
Blackhawk
- Joined
- Dec 21, 2002
- Messages
- 753
You chose wisely. I do the same.
