How Low Can Stocks Go???
WOW!
This word is all my little brain could register when I pulled up my retirement account at Firstrade today.
I’ve been a licensed securities broker for almost 9 years now, and I NEVER saw this coming.
Buy and Hold index fund investing is officially a TRAIN WRECK if you started in about the last 12 years or so. I’M REALLY GLAD for all those variable annuities that I sold between 2003 and 2007…as most of them had GUARANTEES attached to them that may end up being EXTREMELY VALUABLE TO HAVE!
I HAVE NO ANSWER to my title question, and no one else does either. As a student of history and economics, I know this type of market meltdown has happened before, but the variables are so different now. And don’t turn on CNBC, because that will just give you a headache. They will have “experts” on their shows back to back who will completely contradict each other. Both, probably very smart people, are understanding our current economic realities in TOTALLY different ways. BRIGHT SPOT THOUGH…MOST EVERYONE SEEMS TO BELIEVE IN THE LONG TERM SUCCESS OF CAPITALISM AND OF THE UNITED STATES!
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March 3rd, 2009 at 2:39 pm
The question is, is the free market capitalism system of the U.S. going be allowed to work? Or will socialist policies and government intervention destroy our possibility of real recovery?
Gerald Celente of Trends Research Institute said he does not have a prediction for how low it will go … except that it won’t hit zero.
I am thankful we read the economists who were predicting a steep stock market decline based on a variety of factors. We actually traded in all our stocks right around the market peak of 14,000.
Maria @ Residual Income Webs last blog post..How to Make Money with a Website: Niche Topics
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March 3rd, 2009 at 4:05 pm
The market right now is really frustrating. I really feel like now is the time to make a lot of money in the market, but I don’t know what to buy and how much further it will continue to plummet. I bought a number of stocks about a month ago, thinking the worst was over and have seen my portfolio drop to half its value in that short time.
It’s such a scary world out there, I’m not sure what the right idea is.
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Hip Hop Music Reply:
March 4th, 2009 at 2:51 am
It definitely is scary to see your portfolio take such a huge loss. I think the best we can do is think positive but also think of alternatives. Definitely gotta be real careful with investments, and at this point, I’d be leery of the stock market unless you have enough saved in the emergency fund!
Hip Hop Musics last blog post..Ali Vegas – The Top Gets Lonely
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March 3rd, 2009 at 7:48 pm
Guys this is nothing, stocks will go lower yet, be cautious when trading, the market is not going to go into bull run anytime soon.
Make Money Onlines last blog post..How To Get Top Ranking In Google
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March 4th, 2009 at 2:49 am
First off I wanna say thanks for stopping by my site and leaving a comment!
Back to the post though… wow is definitely the only words to describe the market. It is so frustrating. I have seen my 401k lose more money than I could ever have nightmares about. I have told myself I am just going to leave it be, and not even look until we’re beyond the worst of the worst. I just don’t know when that will be. BTW, you’re 100% right about not watching CNBC… talk about a huge headache.
Hip Hop Musics last blog post..Ali Vegas – The Top Gets Lonely
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Horace Brown Reply:
March 7th, 2009 at 2:11 pm
Yea, the 401k’s are really scary now. I can’t imagine for people who were close to retirement who now see that their entire savings is gone. For younger people, it’s not too devastating as we can wait the market out. But for those who are near the end of their work life, I don’t know what they do.
Horace Browns last blog post..Lean on Me to Men of Vizion: A Riff Retrospective
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March 4th, 2009 at 5:30 pm
First I want to say; this is my favorite financial site. I view many professional sites and this rivals any.
I am not an economic or financial expert in any sense but the reason I wrote this is to give my opinion and a warning on the Stock Market.
Ecomomic catastrophes in our nations history have always been marked by eratic stock behavior (not just a linear drop). Some investors tend to see a short spike in stock values and assume the worst is over and they bet the farm to buy low; and I beleive this could be a recipe for disaster. For example at this time I consider it completely possible that we could soon possibly see an 8% increase in single day Stock index values. Many people will think the worse is over, invest alot of money, and lose alot of money.
Doing a little historical research here are the largest single day Dow Jones increases in history:
1933-03-15: +15.34%
1931-10-06: +14.87%
1929-10-30: +12.34%
1932-09-21: +11.36%
2008-10-13: +11.08%
2008-10-28: +10.88%
1987-10-21: +10.15%
1932-08-03: +9.52%
1932-02-11: +9.47%
1929-11-14: +9.36%
1931-12-18: +9.35%
1932-02-13: +9.19%
… I think these dates speak for themselves. If I listed the rest of the largest day increases, the year would be 1929-1933. The stock market must have been doing pretty well huh?
Hope any of this terribly long post is useful to anyone.
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Almost Millionaire Reply:
March 5th, 2009 at 3:18 pm
Much thanks for the credibility boost, I’m getting a big head (which says alot for me as my head is already shaped like a basketball)
Anyways,
Great insight and cautions…I’ve been caught by “sucker rallies” I was even caught 3 months ago…I bought what I thought were great companies at great deals…then they fell 35% more and became REALLY GREAT DEALS…but I had already spent all of my dry powder.
O well, live and learn, and hopefully do better next time.
Almost Millionaires last blog post..How Low Can Stocks Go???
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Almost Millionaire Reply:
March 5th, 2009 at 10:06 pm
@Matt,
It appears your advice about the sucker rally was very timely as the Dow dropped another 4% today.
Almost Millionaires last blog post..How Low Can Stocks Go???
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Hip Hop Music Reply:
March 6th, 2009 at 2:41 pm
I was gonna say the same thing! What’s rough is the sucker rallies make it hard to throw more chips down into the market. Everytime it looks like things are looking up, there’s another big drop. Looking at financial stocks now is like looking at a fast food menu (Citi = dollar menu). Terrible!
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March 6th, 2009 at 2:12 am
I actually have a friend who makes a living trading who believes that we will soon see a large short-term rally, but which will not last. In fact he thinks we’ll see a good 10-15% rally over just a few days.
We’ll see if he’s right. If we do see something along those lines I am SERIOUSLY considering doing some major shorting of the markets.
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March 6th, 2009 at 4:31 am
I have been watching the stocks for quite some time, and it is really depressing seeing how low it has been getting. It just keeps getting lower and lower each day. I am hoping this economy will get better by the end of the year.
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Horace Brown Reply:
March 7th, 2009 at 2:13 pm
Tell me about it. Who would have ever thought stocks would fall below 6500
Horace Browns last blog post..Lean on Me to Men of Vizion: A Riff Retrospective
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March 6th, 2009 at 8:04 am
Hi Brandon,
I don’t really have any particular expertise in finance. But from a “regular guy” perspective … it seems to me that there are still an awful lot of big companies (especially banks/financial) that are essentially bankrupt if it weren’t for all the (borrowed) government money that has already been pumped into them.
At some point, the chickens are gonna come home to roost. I honestly don’t think we’re quite there yet … and I also don’t think there’s anybody smart enough to offer much more than a guess about what’s still to come, and/or what to do about it. If there even is anything we can do.
Ugh, that didn’t feel good, I’m usually such an optimist. Oh well, it is what it is.
Todd
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March 6th, 2009 at 1:23 pm
I just wish I had some more cash to buy some stocks now. Even if they continued to fall, they are so low that it won’t take long to make up the lost ground, and when it gets close to where it used to be before the crash, and it will, there is a lot of money to be made. The problem with a lot of the stocks is not that the companies are not performing so much as the investors are panicking and selling their shares causing the prices to fall. Then more panic, more sell and the cycle continues.
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Almost Millionaire Reply:
March 6th, 2009 at 9:16 pm
@Sire,
I’m right there with you, but I believe that there it is probably going to take a decade to unravel this current mess. I feel for those folks who just don’t have that long to wait. That being said, I’m going to be doing a little bit of buying myself. There are still great companies out there with great products, tons of cash, and no debt.
Almost Millionaires last blog post..How Low Can Stocks Go???
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March 6th, 2009 at 9:33 pm
It’s a shame that so many countries are reliant on what happens overseas. Take our major banks for example, they are in no way anywhere near the situation of the banks in the US, many are still recording big profits, but because of what is happening overseas their shares have plummeted. I would lose big time if I was to sell today, and just hanging on to them waiting for them to go up is causing a loss of other opportunities.
I have tried to work around that by picking what I believe to be my best stock. I then purchased some shares at the lower price and sold them at the higher price. I also sold some of my other shares at a loss to compensate for the loss. This frees up extra capital that I used to buy more shares when the prices dropped again, which is increasing my portfolio. I plan to keep doing this until everything gets back to normal. A slow process in the current climate, but it is working.
Sires last blog post..Punishing Those Who Do Not Adhere To The Comment Policy
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March 6th, 2009 at 10:12 pm
Over here they are actually giving out money, not to keep but to go out and spend. A new aim to try and get the economy larger!
WPThemeKid – Daniels last blog post..Earthquake In Melbourne 2009!
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Sire Reply:
March 7th, 2009 at 1:23 pm
That is the aim Daniel, but I don’t think that throwing money away is such a good long term policy. Most people will use it to pay bills, their mortgage, saving for a rainy day or playing the pokies.
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March 7th, 2009 at 1:38 am
Free money to spend…sounds like Socialism to
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March 7th, 2009 at 1:34 pm
I’m not sure how low it can go, but I’d be lying if I said I thought it would fall as low as 6,500 to begin with. I’ve lost more than 50% of my portfolio, but I figure what’s the sense in going into a panic now, right? Might as well ride out the storm; it can only get better.
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Almost Millionaire Reply:
March 12th, 2009 at 6:07 pm
I agree with you, but I am going to be looking closely for some short term opportunities, as it appears this is truly a traders market right now.
Almost Millionaires last blog post..World’s Best Credit Card
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Mitch Reply:
March 12th, 2009 at 6:13 pm
I’m feeling buoyed today, as the market is up, and finally back over 7,000. Maybe that Citi news was the spark that was needed.
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March 13th, 2009 at 12:28 am
@Mitch, I hope you are right so my husband will quit stressing!
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June 11th, 2009 at 1:34 am
You made some good points there. I did a search on the topic and found most people will agree with your blog.
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January 15th, 2010 at 2:27 pm
The bitter end
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