Comments on: Stock Market: The Sky Is Falling And I want My Mommy!

By: MoneyEnergy

MoneyEnergy — Tue, 17 Feb 2009 02:31:28 +0000

Well here we are in February 2009 now, and much of the markets have actually fallen back to their November 20th lows…. but in a way that’s a good thing… because we haven’t dropped much lower than that and less people are surprised. So I think it’s a sign of more stability in the markets now. The best part about it is that if you don’t have the cash to make a small investment right now, there’s no rush, because it looks like it’s going to be “flat” like this for at least another three months or so.

By: azmomofmanyhats

azmomofmanyhats — Sun, 26 Oct 2008 03:33:09 +0000

Hey John....I love your blog and the recommended reading list you provided. My husband and I are huge Dave Ramsey fans and have been living debt free for almost 5 years now. I agree with your sentiment. People are running scared because they don't understand that markets are cyclical. Heck - even if you do understand that it is still scary to watch your investments lose value. What we have done is to just decide not to pay attention to it right now. We have even invested some more, knowing that historically, the market bounces back. If we are in now and buying "on sale" we have more to gain later. Of course we are not being negligent and placing all of our eggs in one basket, but we are also not bailing out of the market. azmomofmanyhatss last blog post..Cancer Blessings

By: The Stock Market has crashed - Now what? | Option Spreads

The Stock Market has crashed - Now what? | Option Spreads — Wed, 22 Oct 2008 02:33:16 +0000

[...] Stock Market: The Sky Is Falling And I Want My Mommy! [...]

By: Apollo

Apollo — Tue, 21 Oct 2008 12:17:54 +0000

Thank you John. I agree that those who look at their 401(k) plans (which I think are a lousy excuse of an investment plan and not even worth the free contributions by employers) saw them drop 40% and that probably scared those investors which goes back to the lack of education. Those who rely on their 401(k) for retirement purposes and have nothing else will face extreme challenges. A study suggested that 70% of 401(k) plans are mismanaged and underfunded. Of course they are mismanaged as the only choices 401(k) plans offer are those by the worst professional investors in today's markets, mutual funds, and therefore the only natural outcome is failure. Yes, the majority view mutual funds as a professional source of investment advice and as always when it comes to equity markets the majority is always wrong. Those who will stick with their mutual funds may recover their losses over the next two decades but the lost time will never be recovered while the wealth deterioration is another huge problem. Yes, you can have a headline positive gain in your portfolio but your overall wealth has decreased. You are right John, the majority say it as a scary ride which is the reason why it was the opposite. It seems that you are on the right track since you chose to invest now (or better continue to invest) rather than run. Hope your investments will yield the desired return. Apollos last blog post..It was just a matter of time…

By: John

John — Tue, 21 Oct 2008 03:43:54 +0000

Welcome back Apollo! Glad to see you. I agree completely. I think the reason it was tagged as scary by myself and others is precisely for the reasons you stated. The vast majority of “investors” don’t understand what they are invested in. They just know that their 401k lost 40% in the blink of an eye. Judging by the [over] reaction, [severe sell off], I’d say scary ride is how most saw it. You are correct, if more people were educated about the market, they would be doing as I [and I would guess you] have been doing….investing, while others are running scared. Great point and observation.

By: Apollo

Apollo — Mon, 20 Oct 2008 10:54:27 +0000

One thing I would disagree with is that ‘it was a scary trip’. Equity markets in general pose very little to no risk at all BUT the lack of knowledge by the individuals who participate in the market makes it risky to them. Sure, it has been very volatile and a lot of fun to the few sophisticated market participants which make up less than 0.2% of the professional market.

Look at it this way:

If you were asked to operate an aircraft bur have no knowledge about it (i.e. you are not a pilot) to YOU it will be scary and risky but to call the task of operating and aircraft scary or risky makes no sense at all. It is not the aircraft it is YOUR lack of knowledge.

Sure, there is some risk associated with that but not hardly enough to call it risky or do you think of driving your car as risky?

Again, equity markets themselves are not risky but the lack of knowledge by the majority makes it risky to THEM and only THEM!

By: John

John — Fri, 17 Oct 2008 02:28:15 +0000

Thanks James! Yes, I believe there are many bargain stocks available today. I would be accumulating shares at this point, if at all possible.

By: John

John — Fri, 17 Oct 2008 02:26:13 +0000

Cy – I believe our children should have to take some basic personal finance classes as a requirement for graduation. Today’s high school graduates can’t balance a checkbook.

By: John

John — Fri, 17 Oct 2008 02:24:05 +0000

Blake – Now seems like a great time to start dollar cost averaging into the market.

By: James

James — Wed, 15 Oct 2008 15:57:26 +0000

If history has taught us anything, the market is cyclical. Great point as to “locking in” or assuring loss by bailing now, I think it will turn around. Some calculated shifting of funds may be an option as well, now is really the time to start shopping and speculating for all the huge bargains out there that will surely rebound. Just as examples Google, Yahoo, even GM and Ford. Just my opinion, great post John.