Stock Market

[W4HAY]

The sources mentioned above were warning of an impending market nosedive because of excessive debt and unrealistic prices, especially in the real estate markets, a couple of years before the '08 collapse. The zero-down, sub-prime interest rate, and approval of loans to unqualified borrowers were driving factors. Early in '06 investors were advised to begin dollar-cost-averaging out of equities and into interest-bearing instruments such as long-term CDs and bonds. These warnings escalated when it became apparent that there would be a drastic shift in the makeup of the House and Senate.

Savvy investors made the move and took advantage of CDs in the 4-5% interest range, even though they didn't seem that good of a deal at the time.

The bursting of the dot-com bubble was also accurately predicted and investors were advised to begin dollar-cost averaging away from high-flying tech stocks. Those that failed to heed Greenspan's "irrational exuberance" warning paid the price.

The markets are not black magic if one does their homework.

For those that want to be proactive about managing their lifestyles, consider Kiplinger's Personal Finance Magazine. I've used it for decades and it's always been very helpful for everything from planning for one's requirement to selecting the best car and even finding that exceptional $10 bottle of wine.

[WF7A]

I have to smile wryly when I read about investment and stock advice here and elsewhere since, being one of the working poor*, we're lucky we have food on the table let alone having any money to invest...and there are tens of millions of us. :S


*We're flat broke days before each paycheck (we don't have any savings--all gone to medical bills. We also live a very simple lifestyle: no fancy stuff like cable or satellite TV, no going out for meals, etc.)

[N2EY]

I think a lot more than 1% hold 401K's or some other retirement savings that involves the sale of stocks

But the total amount invested by the 99% isn't that much per capita, compared to the 1%. A lot of 401Ks and IRAs are in mutual funds and bonds, not individual stocks.

It should be remembered that "the stock market" indexes and prices are ONLY about very recent sales. For example, say Amalgamated Widgets has 10 million shares of common stock in the market. Say that on a particular day 1 million shares change hands at a price of $100 per share. The stock price is then $100.

But the next day 1,000 shares change hands at $90. Big dip, right? Does it mean the company is suddenly worth 10% less?

Nope.

73 de Jim, N2EY