I didn't know what or how the numbers on the dow worked. So I googled it. The word Magic explained it all. Take a look. The DJIA is a “price-weighted” index, which means that it is calculated by adding up the 30 companies' stock prices and then dividing them by a magic number called the Dow Divisor. ... Because it is price-weighted, stocks with a higher price carry a greater weight in the index. Aug 3, 2017. KEYWORD MAGIC.
PixelStan77 wrote:
Sell before the crash!
Before the Democrats take over.
SteveR wrote:
Before the Democrats take over.
Better stock up your outhouse with toilet paper.
DirtFarmer
Loc: Escaped from the NYC area, back to MA
PixelStan77 wrote:
Sell before the crash!
I suspect you have time. The economy is still in pretty good shape and the dow may be bouncing around in neutral but most of the analyses I've come across predict it will continue until sometime next year. This is all hearsay of course since I'm not an expert in economics.
But if you know what you're doing you can make money on the correction (a much nicer word than crash). Timing is everything.
DirtFarmer wrote:
I suspect you have time. The economy is still in pretty good shape and the dow may be bouncing around in neutral but most of the analyses I've come across predict it will continue until sometime next year. This is all hearsay of course since I'm not an expert in economics.
But if you know what you're doing you can make money on the correction (a much nicer word than crash). Timing is everything.
Most of us invested in mutual funds or index funds have advisors who are against market timing and tell us just to ride out the downturns. I wish I hadn't taken the advice during the last downturn. All of our investments were at zero cost basis and we could have converted to cash with no tax penalty. I should have known better.
DirtFarmer
Loc: Escaped from the NYC area, back to MA
There are online brokerages that allow you to do your own investing. You can send them a buy or sell order and it gets executed in seconds rather than waiting to go through some guy who handles your account. They also provide the traditional service of offering you advice but you don't have to take it.
Only recommended if you have some experience and can watch the market closely.
PS: Experience occasionally comes from bad decisions
DirtFarmer wrote:
There are online brokerages that allow you to do your own investing. You can send them a buy or sell order and it gets executed in seconds rather than waiting to go through some guy who handles your account. They also provide the traditional service of offering you advice but you don't have to take it.
Only recommended if you have some experience and can watch the market closely.
PS: Experience occasionally comes from bad decisions
What do you invest in, stocks or mutual funds? One advantage of working through a CFA is that they can put together a diversified portfolio of mutual funds or index funds based on your long-term investment goals. That is how we are currently invested. We now, however, have sufficient savings that I am tempted to purchase individual stock to provide more income/interest on our savings than the bank would provide. I passed on Amazon at 850 because it only had a dividend of $5/share. Now it's around $1850 in less than a year. I still think my reasoning was good.
Take your money to a local casino, forget Wall Street. In both places the money you put down look at it as it is lost before doing any thing. When it runs out walk always.
Nothing could be further from the truth. You must not be an investor. I have made quite a lot of money in the stock market, as did my mother, my brother, my friends, in fact millions and millions of people have. So I don't get your comment when the data on what people make in the market suggest otherwise.
SteveR wrote:
Before the Democrats take over.
Pelosi and Schummer will have a ball at our expense!
The stock market went from 10,700 to just under 7000 during the Bush years and Republican control of the house and senate. During the Obama years, the market went from 7000 to about 18,000. During the Clinton years, the market went from the mid 3000's to 10,700. So far for Trump, the market has gone from 18000's to 25,000+. So, it would seem to me it is hard to pin market direction on who is in the White House. Yes, if the market is juiced up with tax incentives or with stimulus packages, the market will move up, but then over time, the market goes back to where earnings drive the value of the market.
Would I be cautious during the election period this year, yes, I would. I am going to start selling some of my stocks that have seen more gain than I think is warranted just for their earnings growth. For instance, I will be selling Amazon, Netflix. Amazon is up 145% since I bought it, and the company has a very high P/E ratio. Netflix, I am up about 70%, but with the subscriber numbers slowing down, I believe this stock is getting more risky. What is more likely to cause the market downturn is any significant inflation caused by the tariff program, or simply a very high GDP growth, resulting in the Fed raising interest rates to slow it down a bit so as to reduce inflation rates. Shifting to bonds is what many people do or simply CD's to take advantage of the higher interest rates.
People do get greedy, I am a victim of greed too, so we tend to hold on to stocks at high levels, then when the market starts to swing down, we sell way to late, and lose a lot of what we have gained.
Ok, there are three potential things that will happen in the future, the market will either go up, stay the same, or go down. Very few people have ever predicted the market accurately. Those with a ton of money in the market have ways of protecting their risks with hedging, but I am not smart enough to do this.
Interestingly with all the buzz that Democrats are going to have the majority in the House, has not moved the markets. I would have thougth if this was going to be a factor, some movement would already have happened.
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