The DOW Tanks!!!

[khuezee]

Hello All,

Just wanted to get everyone's opinion on this. I have watched all the cable networks and their spin on the current market outlook. So I just wanted to get opinions around the forum and see what your views are...

I am just an avid investor and have not lost much $$ in the market since I have only started investing in the last couple of months. I feel bad for those that have taken such a bad hit within the last couple of years in their stocks and 401k.

What I want to know is...Is it a right time to buy? Or will their be another bottoming out? I understand the market should correct itself eventually, so I figure that this would be a good time to buy since I am only 25 years old and have plenty of time to weather this bear market. Any insights from seasoned financial folks and successful investors would be helpful for me and many other folks.

Thanks,
Khue

 

[milz50]

Invariably, if you ask a group of people about the future of the stock market, they will claim to know where it will be in the future. I would be cautious of anyone who claims they know what the market is going to do in the short-term. I just don't think it is worthwhile to try and 'time' the market.

It sounds, though, like you have a risk tolerance and investment horizon that would make investing in this type of an environment worthwhile.

Those individuals who, psychologically, are unable to swallow major daily or weekly fluctuations should probably be more cautious now.

If you decide to increase your positions (I am), given the volitility, it may be a good to dollar-cost average. This concept means to invest equal amounts of money at regular intervals. Thus, when the market is in the shitter (like it seems now) you are buying more shares than when the market is high. This can lower your average cost-basis of shares in the long-term.

 

[akira3d]

have not lost much $$ in the market since I have only started investing in the last couple of months

Unfortunately, I started playing this game roughly three years ago and have not fared so well. I've seen my 401k drop big time (too afraid to do read the ACTUAL numbers) and I've watched my other investments take huge hits (one went from $50.00 per share to $0.50).

The only plus I have in all this is that I decided to buy my NSX new back in 2000...therefore protecting a good chunk of change that would have otherwise been sunk into the diving market. I guess you could say the NSX was my smartest investment.

So I guess I'm not the guy to ask about these things...

------------------
--akira3D
'00 Acura NSX-T (red/black), '97 Honda Civic HX (black), '01 Lexus IS300 (black/black)
"Reality is better than the dream..."

akira3d.com/nsx

 

[Darkcyd]

News that the market has just tanked further is always a heart-shaking prospect for those who are invested in the market. However, I would advise you to examine the current situation and follow the steps to the logical conclusion. The US economy still remains strong despite market uncertainty. We have the lowest interest rates in years. How do you make money by investing in stocks? 2 ways - 1) Buy low and sell high or 2) Profits/Dividends. The DOW has seen a 2000 point decline in the last year, which means you're getting everything at 20% off. Granted if you're looking for strong performance figures in the next 6 months to a year I think you'd be better off sticking it under your bed. Just kidding, you can go with a balanced fund or one invested in bonds which will net you a return better than the pathetic interest you'll receive at the bank. But in the long run, now is the single best time to be investing. Dollar cost averaging is also a good recommendation if you're not as confident. Remember that when investing in the market, do the opposite of what everyone else is.

Nobody makes money by jumping on the bandwagon. By then the money has already been made. It is the unfortunate truth that most investors are not sophisticated enough to make the correct choices regarding their investments and not enough have financial advisors to assist them. Just my 0.02. =)

 

[Tony Montoya]

You're not buying low now, you are just buying lower than obscenely high.

 

[Darkcyd]

You're implying that the entire market was super-inflated which it was not. If you're talking about single-issue stocks I would agree with you on certain ones. Especially as this was evident in the tech boom several years ago. But the US market as a whole is not inflated and there are very very good opportunities to invest right now for those who have the sense to do so. Those ppl who sold their investments after 9/11 for fear of the market drop ended up losing money. Those ppl who put money in immediately afterwards experienced 30-40% returns in the next quarter, across the board.

 

[MAJOR STONER]

"Buyers beware. After the last bear has left the building, people should not expect a big wave of emotional buying that will ignite the next bull market."
http://reuters.com/news_article.jhtml;jsessionid=WBYTPDSHEOLS4CRBAE0CFFA?type=businessnews&StoryID=1226867

 

[Tom Larkins]

At 25 years of age, you must remember "long term". You have many years ahead of you to make your way. I won't repeat what has already been said hear which is good advise. I will tell you that if you listen to many on the folks on TV, you will go nuts. Trying
figure out what is going on right now is as certain as the weather. At 40, I have been hammered, but I was also beat down in 1987 w/a 500 pt loss in one day for which everyone on TV called the "2nd Black Monday". For those that stuck it out, they made much more. I still have years to make it up even with whats going on now, and I will. This is a great buying time if the income is available. Sure it could go down more, but you will make it up over time as well. Its a fact of the market. The thing I see now that is different is the frenzy w/.com's isn't coming back IMO anytime soon. I think the next run will come w/the old basics. The proven producers or the right blue chips will hold the water in the down times. Ya they will will go down as many have been doing, but not quite as much is you do your homework, if your in it for the long haul your not gonna get hurt as much and then you can afford to mix it up w/something more speculative or maybe sit your money in cash untill you see the clouds pass somewhat.

 

[ilya]

I looove Worldcom... yes I do.

I looove Worldcom... how about you?

[This message has been edited by ilya (edited 22 July 2002).]

 

[Dr.Honda]

Watch Rukyeser's show, when all his elves turn bearish, buy.

 

[Ponyboy]

I've been using the dollar cost averaging idea for a few years now and though I've lost money (who hasn't?) I'm still investing. Most of the stocks we own are companies we believe in or like. Once we feel a company's products are crap we take a look at whether we should sell it.

FWIW, my wife works for WorldCom and has survived 8 layoffs so far. She and most of the people she works with feel awful about what their company has done to investor confidence and the market in general. And, of course, we're concerned about her job. And yes, we owned quite a bit of WCOM and MCI stock.

 

[MAJOR STONER]

There is an annual limit of $3,000 on stock losses that can be used to reduce taxable income. However, taxpayers can carry losses above that forward into other years, stretching out the period of revenue loss.