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DJIA Down 390 points

post #1 of 11
Thread Starter 
This is getting bad. I have to admit I am starting to get nervous, as my IRA is down 15% from where I started it.
I am in it for the long term (the market), but this is the worst I have seen things since the junk bond era.

Having said this, I think many other areas of the economy are in good shape. Real Estate, Consumer Spending, etc. are all decent. I think people have simply lost confidence in corporations. Inflation is low, interest rates are low; isn't it just a matter of time 'til it turns?

My understanding of our economy is that when the short term discount rate stays low, it has the effect of pumping money into the system, since banks can borrow at a low cost. I have to assume that since rates have been so low, it will have the desired affect.

This BLOWS.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
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I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
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post #2 of 11
[quote]Originally posted by SDW2001:
This is getting bad. I have to admit I am starting to get nervous, as my IRA is down 15% from where I started it. <hr></blockquote>

Sucks to be you.

 

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
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“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
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post #3 of 11
15%? I refuse to even look at my retirement accounts, but I'd guess they're down at least 1/3 from their high.

But that's good - you want to BUY low, right? As long as you're not selling, you're in good shape. The lower the better, as far as I'm concerned, at least in my retirement accounts.

And you shouldn't expose your short-term money to stocks much anyway, right?
post #4 of 11
First of all, I know I am no economist so don't flame me if you don't agree with me. The situation we have now is truly unique. The economy is still growing. The recession we had was very short. Most aspects of the economy actually seem to be doing pretty well. In my opinion there are two main factors that are contributing to the market problems.
1) The markets are still coming back to realistic levels from the .com and tech boom. This is only a part of what is going on.
2) This is the bigger contributor. Basically, people are losing confidence in corporate America. Enron, Worldcom, Qwest, etc. are all hurting the economy because people are afraid to invest in large corporations. The Bush administration can only do so much and changes will not happen immediately, contrary to people's wishes. Companies were allowed to run wild in the mid and late 90's and this is the result. I think the crackdown that is beginning to happen now will probably expose more cases like Enron BUT in the next few years people will be more confident in big business and you will see the markets reflect that. Unfortunately, people don't like to wait a couple years. The American people expect immedieate change, which simply is impossible.
I have a fever and the only prescription is more cowbell.
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I have a fever and the only prescription is more cowbell.
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post #5 of 11
Dollar cost averaging... When stocks were overpriced your money didn't go as far. If you're still buying at the same rate as before, your dollars will have a lot more reach in this market. My 401K has taken a hit too but in the long term I'll be okay. Unemployment, inflation and interest rates are still low. GDP is up. It's just equities that are hurting. Sooner or later the lines will cross.
shooby doo, shooby doo
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shooby doo, shooby doo
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post #6 of 11
I'm dusting off my resume and thinking of possible alternative careers until this passes. Know any good jobs in a bad economy? So far I have garbage man, er, sanitation management engineer...
post #7 of 11
I started my first 401k in February. Put it all into the guaranteed 4% return fund for now. If stocks were trading at their historic levels the Dow would be somewhere in the neighborhood of 6500.00 Reality can only be avoided for so long and we are seeing a return to it.

Things should get really fun if either the economy keeps stalling and the fed can't lower rates any more than they already are or the dollar gets weak enough and inflation starts to kick enough that they have to raise rates while the economy is stalled out.

I personally think we're in for either a double dip recession or some good old 1970's style stagflation, but that's just me.
post #8 of 11
I think 8000 will be the imaginary threshold investors won't dare to cross (even though they crossed it today.) I'm also not very good at predictions
I can change my sig again!
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I can change my sig again!
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post #9 of 11
I agree that 8000 is this imaginary threshold, but the good news is that while it probably will dip below that number, the Dow will stay close to it for that reason.
post #10 of 11
I cashed out my personal mutual funds 2 weeks ago, and paid off my car loan. Currently debt free except for my house. Also reallocated my retirement plan allocations to more government securities and bonds. I sort of think I still have too much invested in the S&P 500 index style fund in my plan, but I'm still young.

I would be very very careful with the analyst koolaid. The DJIA can break through 8000 like a hot knife though butter. It's just a number. At some point in time (8000, 7500, 7000, 6500, who knows), there will be more bargain hunters, the market actually performs, and companies can show growth, then the market will go back up again. The problem is the analysts won't know any better than anybody else on when that happens.
post #11 of 11
The key is knowing how to make money in any market. That I can share with you all for a flat rate of 29.95 a month Plus, you can get my book for 3 easy installments of $49.95! It's that easy!
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~Winner of the Official 2003 AppleInsider NCAA Men's Basketball Tournament Pool~
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