Relax, the market will adjust itself.

[gatorboy]

I heard it here last week so it must be true!

[Horse with no Name]

1. Ummm...I think that is what is actually doing

That's the scary part. :scared:

[Dogmudgeon]

2. Well, it WILL adjust itself

Of course, we may not LIKE where it comes to equilibrium ...

--p!

[Junkdrawer]

3. Once we get to $8500 on the DOW, stock dividends will return about 4% money....

Bluechips have that built in as a floor.

Now, NASDAQ and the S&P 500 are a different story...

[dmallind]

4. It will

However this may take some time to recover losses to daye.

Which is of course a pain only to those who foolishly used equities for short term needs (assuming that these people were not skilled and/or lucky day traders who gained by buying wildly vacillating shares at opportune times).

For the vast majority who have stocks as part of a retirement plan and took the widely available and easy to remember advice to reduce the portion of those funds in equities as retirement nears, they either have plenty of time to see gains come back, or very limited exposure to these temporary losses.


Since when did "last week" become a reasonable time frame to measure these things.

I mention this in a lot of chicken little threads and have NEVER been taken up on it but I am willing to buy, with escrowed funds and legally binding contracts, futures in the index fund of their choice for anyone who is predicting 30s-style collapses of 75 (heck I'd even do 50!) percent at rates which would give them extremely nice returns if their panic is correct.

I have cash available. I will place it in escrow so I cannot renege, as long as you do the same with your futures contracts. Give me your predictions folks and I'm willing to put MY money where my mouth is. Why don't I have any takers who'll do the same? DJIA at 7000 anyone? Anyone?

[TexasObserver]

5. You say you're willing to buy from DUers? Why not just play the market?

You don't need to find a trading partner HERE. That seems bizarre. You're acting as if you're ready to make the bet, but only with DUer's. Why not go play in the market, where you can bet on any move you think is coming?

[dmallind]

9. Because nobody out of here is so consistently chicken little

There is nobody who will SELL me futures at those kind of silly TEOTWAWKI levels that people here predict. Nobody REALLY thinks we'll see the 75-90% losses of the depression - nobody is willing to bet on it anyway. The difference is a small but vocal minority on DU keep saying confidently and even smugly that there WILL be this kind of collapse, but refuse to back that up.

Trust me if people were selling, say, Dow futures at 50% less than today I'd be buying up a storm.

But they're not.

Within the much narrower range of possibilities people ARE willing to sell or buy at I have no firm predictions beyond it being a good time right now to buy well capitalized financial company stockls, which I am indeed doing.

Remember there's a world of difference between "there are going to be some rough times ahead" and "we are in for a collapse as great or greater than the 1920s-30s". I agree with the first. I think the second is laughable.

[TexasObserver]

12. That's a straw man.

No one with any money to invest in the markets is saying we are headed to Depression era levels. People who say that don't know the first thing about markets.

You've posed a straw man, because the issue isn't whether the DOW will drop 50%, the question is whether it will drop 10%. It'll bottom in the 8Ks or 9Ks.

You're just suggesting a bet you can't make and no one will take. I'll bet the sun is in the sky tomorrow. Want to bet me it isn't?

[dmallind]

16. You are correct, and then again not.

I am merely tweaking those who as you say don't know a thing about markets, but yet predict confidently (and in several cases with glee) such massive collapses. You are correct on that part.

But it's not a strawman - it's calling a bluff. I know it's not realistic. You do too. But we're not the ones crying "Depression!" and "401K gamblers deserve to be broke!" either.

If you haven't seen such predictions around here then you haven't been looking. Such people don't even have to get a brokerage account either to make some money if they are confident of their predictions. I will happily pay escrow fees to arrange an irrevocable exchange of funds based on the difference between a chosen market index and these wild doom and gloom guesses.

[TexasObserver]

17. I agree with you that this is no Depression. It's a 1987 style recession.

[CTyankee]

6. I smiled at your response. Reminded me of what J.M. Keynes reportedley said

when he was told that the "market would right itself in the long run"

"In the long run," Keynes said, "we're all dead."

[dmallind]

11. So true, but I doubt we have THAT long of a run to worry about here

Well not for those with the kind of expected lifespans that would warrant playing in the equities market anyway.

I could be wrong of course, but few same and informed commentators are suggesting this will be a massive drop lasting more than a few years. Even the hyperventilator quoted says five years is the horizon to worry about. Dammit in taht case I even agree - anyone five years from retirement should have been out of stocks woth most of their money long ago. Sorry if they weren't, but that kind of advice - and even the kinds of fund options that do this automatically - have been available for 401K investors and private investors for many many years, so nobody else's fault.

However given that I'm 20+ years out it only makes sense for ME (and most others of the 401K generation) to decrease investments and pull out of equities if I think that NEVER in the next two decades will we see 10K+ again. Assuming (correctly) that I consider that unlikely in teh extreme, what else is this now for me but a buying opportunity?


Again - rationally how can anyone predict that we will not see levels any higher than now for the next generation? If you have THAT kind of horizon shouldn't you be buying not selling? I moved my allocations more into bond funds when we had a 13K+ market, but now is the time to buy MORE stock funds for people with a long term view.

But heck bookmark this thread and come back in five years to taunt me if I'm wrong folks. Somebody doubtless will. But nobody's sure enough to bet on that NOW.

[CTyankee]

18. No, you seem to be going on the same advice I have heard and I don't disagree.

I am retired now, but I inherited money from my parents' investing habits starting back in the 1950s. It gave them a comfortable retirement (that and being naturally careful with money, altho my mother travelled extensively). I am comfortable now because they amassed what they did back when I was much younger.

My broker/dealer is holding onto some of my cash to get the best bargains he can. It's a great advantage having cash to do this. Plus some pretty good investments paying me every month so that I can have a steady, reliable income.

I can't worry, really, because that won't do any good. I just naturally live beneath my means, altho I, too, have become an extensive traveller. I have a bucket list of places I want to go and by damn, I'm gonna do it if I can! My mother is smiling...

[dmallind]

19. Understood, sincere congrats, and I was not clear on my "you"

I meant it as a generic you. You personally are in a position where the stock market drop should only be hurting your "play" money, and it seems like that's the case. In which case you can bargain hunt and afford to lose if we're wrong.

I can afford to lose short and even mid term too.

Most models I've seen have a ten year low estimate of 13.5K for the DJIA and a high estimate around 20K. By that time I'll be 50 and ready to move a chunk of mine out of stocks too. Till then I can ride out a year or two of 8's and 9's as can anyone who is not so close to retirement. NOw sure I won't see the 15%+ annual gains of the 90s most likely, but even there we have to remember the DJIA is not "the market" and there are definitely some bubbles to come in the next 20 years. Alternative energy probably first, followed by nanotechnology and advanced genetic therapies could all drive significant gains over and above the usually more or less staid blue chips.

[CTyankee]

21. Well, we'll see...

I don't know and I admit it. I have been, in the past, a bit hesitant, and I hate that. So I my be a bit more lenient. Who knows????

[Tierra_y_Libertad]

7. So does nature...often with unpleasant results.

The Great Dying of the Permian Extinction was just a little adjustment in the cosmic scheme of things. And, the Black Death was minor adjustment of the flea/man ratio.

[Geek_Girl]

8. That's exactly what it's doing

Unfortunately you may loose your shirt in the mean time.

[HCE SuiGeneris]

10. I'm gonna loose my tie.

[LaPera]

13. It will and is....

This the Bush & republican corporate economy for the rich...

[OhioChick]

14. Sure is...

Down -722 now.

[spinbaby]

15. It's lost a third of its value in the last year

That's going to be some adjustment

[MissMarple]

20. It probably will, it's knickers are all in a twist.

That must be very uncomfy.