One of the reasons I asked was also because I’m still a rookie at investing and wanted to hear some opinions. I’m as green as can be when it comes to stock market investing, and I understand people lost lots of money, but is the drop really a reason to be nervous? I understand it’s a sign there might be a change in the lending market, but is this a reason to be nervous about investing in the stock market or to start trading all your stocks? I mean it’s not like the America is an unstable country. It’s no reason to start pulling all of your money out of the stock market, right? This is a proven market that should stabilize itself in a while, no? Is this just an opportunity to buy cheap stocks?
Chime in on the stock market plunge?
TORY
Comments
The world is not stable and the US market is closely tie to the world. Cash is shifting to the bond market and less volatile commodities.
Try a high growth foreign market and leave the US market to the pros for right now.
Plunges in the market have historically been a good time to invest. Now, it also depends on where you invest as well.
There certainly is reason to believe that stocks might get cheaper still. America is not so stable as you might have imagined. It is fueled by debt. Now that debt has become shall we say unstable, the fuel supply might be facing an interruption. This might just be the beginning. On the plus side most corporations are fairly healthy and stock valuations are not out of line with reality. But none of that will really matter all that much if people stop spending, which there are indications that they are.
Here’s my take: there are investors that are bulls and investors that are bears. The volume of trading lately has been extremely high compared to past volume levels. The news has been all over the map and investors interpret each bit of news the way they want. This leads to high market volatility.
If you are not able to follow the market closely, now is probably not the time to have your money in the market. Simply move your money into fixed rate accounts and wait this out. If you can survive the immense swings day-to-day, you can make lots of money with the volatility. It takes lots of homework on the stocks you own. If you have done the homework, you will know what to do with your holdings.
Ron, ChFC
