That's it. I've had it with themarket.

[kherman]

OK, the market the past two weeks or so has me psissed. Am I the only onme who is going to put no more money into it for a while????

 

[Garet Jax]

I am going to continue to make 401K contributions.....

 

[FeathersMcGraw]

Originally posted by: kherman
OK, the market the past two weeks or so has me psissed. Am I the only onme who is going to put no more money into it for a while????

What ever happened to long-term investing?

 

[bunker]

Buy low sell high. I'm buying.

 

[FettsBabe]

I'm putting in $120 dollars every pay period and I'm losing $1000 every 4 months. I'm really considering putting it in a mutual fund. The point is you are not buying low when you are losing what you contribute every 4 months.

 

[kherman]

Originally posted by: FeathersMcGraw

Originally posted by: kherman
OK, the market the past two weeks or so has me psissed. Am I the only onme who is going to put no more money into it for a while????

What ever happened to long-term investing?

The stocks I already own will not be sold => long term investing. I own financially strong companies that will be here in 10 years.

Just leave money in cash and grow the cash reserve till Iraq, the economy, terrorism, etc are under control. Once things stabalize, I'll put a bunch of cash in all at once.

You see, I'm still going to be a long term investor, I'm just going to leave my cash reserves as is for a while.

 

[kherman]

Originally posted by: FettsBabe
I'm putting in $120 dollars every pay period and I'm losing $1000 every 4 months. I'm really considering putting it in a mutual fund. The point is you are not buying low when you are losing what you contribute every 4 months.

I guess this is my view too. What is low? IMHO, I thought the Dow at 8000 was about right. Now it's at 7400. Why buy now? Will it hit 5000? I don't know anymore.

I'm a long term investor, but I don't want to overpay for my investments. I simply want to wait for theeconomy to improve and the markets stabalize. Having cash reserves is part of investing.

 

[FeathersMcGraw]

Originally posted by: kherman
I'm a long term investor, but I don't want to overpay for my investments. I simply want to wait for theeconomy to improve and the markets stabalize. Having cash reserves is part of investing.

Each to his own strategy, but I think investing is discipline. Once you start trying to time the market bottom, you're not looking at the long-term anymore, which is that the market trend including corrections over time is upward.

My notion of true long-term investing would be to continue regular investment patterns, using the decline in prices to acquire additional shares at reduced prices anticipating the eventual (and eventual may be months, quarters, or years) rebound. Am I losing money now? Yes. Do I think I'll still be losing money in 20 years? No.

 

[kherman]

Originally posted by: FeathersMcGraw

Originally posted by: kherman
I'm a long term investor, but I don't want to overpay for my investments. I simply want to wait for theeconomy to improve and the markets stabalize. Having cash reserves is part of investing.

Each to his own strategy, but I think investing is discipline. Once you start trying to time the market bottom, you're not looking at the long-term anymore, which is that the market trend including corrections over time is upward.

My notion of true long-term investing would be to continue regular investment patterns, using the decline in prices to acquire additional shares at reduced prices anticipating the eventual (and eventual may be months, quarters, or years) rebound. Am I losing money now? Yes. Do I think I'll still be losing money in 20 years? No.

I agree with about 95% of what you say.
As for the market indices, they arn't that important. They are just general measures of the market. I realize there are deals out there. Maybe I am putting my foot in my mouth (or a$$) by backing out for a while.

I do need to build some cash reserves though. Have alot of stuff happeneing this year (my wedding and a deck for my house). To quote you, and agree with you, "Am I losing money now? Yes. Do I think I'll still be losing money in 20 years? No." Maybe by backing out now, I will miss out on the "bottom"? I should probably "continue regular investment patterns" and let the law of averages do it's work.

 

[Ameesh]

Originally posted by: Garet Jax
I am going to continue to make 401K contributions.....

 

[OutHouse]

I stopped making my 401K contrubutions. I was putting 500 a month and my ROI was -37% so far this year. at the moment i have a better ROI with a savings account. The trouble iwth buying low is that this month was lower than last month and the month before that.... im tired of loosing my shirt.

 

[mithrandir2001]

I recently increased my weekly contributions by 50%.

Equities are undervalued, and that's not simply because they have fallen in price. The American economy is fundamentally sound and companies will make strong profits again. Please dump your stocks and allow me to buy them even cheaper. I've lost a lot of money over the last 2-1/2 years but the silver lining is that I've been loading up on cheap equities week after week. Stocks will not be down-and-out forever. If you didn't think stocks could drop 40-50%, you shouldn't be invested in them. Equities reward long-term investors which stick to their principles through good markets and bad.

 

[wyvrn]

Originally posted by: mithrandir2001
I recently increased my weekly contributions by 50%.

Equities are undervalued, and that's not simply because they have fallen in price. The American economy is fundamentally sound and companies will make strong profits again. Please dump your stocks and allow me to buy them even cheaper. I've lost a lot of money over the last 2-1/2 years but the silver lining is that I've been loading up on cheap equities week after week. Stocks will not be down-and-out forever. If you didn't think stocks could drop 40-50%, you shouldn't be invested in them. Equities reward long-term investors which stick to their principles through good markets and bad.

Agree.

I'm putting in $120 dollars every pay period and I'm losing $1000 every 4 months. I'm really considering putting it in a mutual fund. The point is you are not buying low when you are losing what you contribute every 4 months.

You don't understand the term dollar cost averaging, do a search on google. You also don't appear to understand the cyclical nature of the market. Read up on the big money winners in the market, and how many of them capitilized on down markets. Should be nearly all of them.

kherman,

Do more research on market history before you dump money into cash accounts. First of all, these accounts are most likely low interest which means you lose to inflation even though you think you are retaining your money. The point is, if you don't invest in something (stocks, bonds, real estate), you by default are LOSING value anyway.

 

[rh71]

Out of my paycheck, I am throwing in $260 for 401k (company matches that much) and $450 for company stock (15% discount) PER MONTH. It doesn't add up to all that much, and when compared to the potential for gain, I'll continue gambling with those...

I would never gamble with the real stock market. You can call it an investment all you want, but it's money you put in to gain or lose - that's gambling to me. I can't trust myself with learning trends and analyzing them.

 

[BooneRebel]

Originally posted by: rh71
Out of my paycheck, I am throwing in $260 for 401k (company matches that much) and $450 for company stock (15% discount) PER MONTH. It doesn't add up to all that much, and when compared to the potential for gain, I'll continue gambling with those...

I would never gamble with the real stock market. You can call it an investment all you want, but it's money you put in to gain or lose - that's gambling to me.

Buying your company stock is gambling with the 'real stock market'. The only difference is, and this is a biggie; If your company goes under then you have lost your job -and- your savings. Better to diversify. Few investment counselors, if any, will recommend to an employee that they participate in company stock purchase plans. Does Enron ring a bell?

 

[Evadman]

Originally posted by: bunker
Buy low sell high. I'm buying.

 

[kherman]

Originally posted by: wyvrn



kherman,

Do more research on market history before you dump money into cash accounts. First of all, these accounts are most likely low interest which means you lose to inflation even though you think you are retaining your money. The point is, if you don't invest in something (stocks, bonds, real estate), you by default are LOSING value anyway.

You didn't tell me anything I already didn't know. I appreciate the advice though. I think I need some "oh shoit" money in a savings account. Right now, I am essentially fully invested.

 

[Mister T]

I am close to "borrowing" $20,000 at 5.9% interest (unsecured) and dumping it into 6-7 stocks...

no joke

edit: I guess it depends if I get fired this week :Q

 

[DaveSimmons]

I'm still buying, though it's an S&P500 index mutual fund. Sure, the shares I bought last month have lost money this month but I'm buying to sell years from now after the recovery. Unless we end up living in a Road Warrior future the market will recover over time, and I'll have a nice profit from buying near the bottom.

For people that can't afford to buy-and-hold, now might be a good time to pay off your credit cards and put aside a small amount of cash so you aren't living paycheck-to-paycheck, but I still think it's an even better time to buy.

 

[rh71]

Originally posted by: BooneRebel

Originally posted by: rh71
Out of my paycheck, I am throwing in $260 for 401k (company matches that much) and $450 for company stock (15% discount) PER MONTH. It doesn't add up to all that much, and when compared to the potential for gain, I'll continue gambling with those...

I would never gamble with the real stock market. You can call it an investment all you want, but it's money you put in to gain or lose - that's gambling to me.

Buying your company stock is gambling with the 'real stock market'. The only difference is, and this is a biggie; If your company goes under then you have lost your job -and- your savings. Better to diversify. Few investment counselors, if any, will recommend to an employee that they participate in company stock purchase plans. Does Enron ring a bell?

Of course the company stock isn't doing so well at the moment (while I'm closing on a house - thanx a lot) ... but if IBM goes to $#!t in the way of Enron, we'd definitely be in more economic trouble than we'd like to know. A few hundred dollars per month really isn't a big deal when looking at the big picture. I use the term "real stock market" meaning something that'd I actually have to worry about - prices fluctuating and when to get my money out. I wouldn't gamble further savings in the "real market" on top of, or in place of, the company purchase plan.

 

[FettsBabe]

What I put in every four months is lost due to the losses I have suffered every four months in the stock market. I have moved 60% of my new contributions to bonds (5% return). Yes, that is low, but it is the only thing that stopped me from losing $100 over what I actually invested the last four months. The other 40% is in the stocks.

When I see that the stop market has increased (a small amount) then I will shift my money back to those accounts. Then I can gain with everyone else, but lose less money in the process. The stop market won't go up 2600 points overnight, so when I start to see a small increase I will shift my money back to the stocks.

I call it the rhythm method!!! :0

 

[FeathersMcGraw]

Originally posted by: FettsBabe
What I put in every four months is lost due to the losses I have suffered every four months in the stock market. I have moved 60% of my new contributions to bonds (5% return). Yes, that is low, but it is the only thing that stopped me from losing $100 over what I actually invested the last four months. The other 40% is in the stocks.

Of course, risk-averse asset allocation means you should have had some portion of your contributions going to a non-stock (money market or bond) source anyway. Diversity can mean sectors like technology, medicine, or banking, but also refers to different investment types (stocks versus bonds versus cash, etc.)

Be wary of trying to shift your assets around frequently to time the market, however. Provisions in plans vary, but some 401(k) plans limit the number of asset shifts you can make in a calendar period (to limit expense fees associated with buying and selling the underlying securities). If your plan has such restrictions, you may be caught with your investments in bonds when stocks begin to move again (they're moving now, but I meant upward).

And the most important thing to remember is that there's no gain or loss realized until you take your money and run. Yes, your net value on paper is declining, but your contributions are still accruing shares of investment. If you're not planning on tapping your 401(k) for either emergency purposes or a first-home purchase (both of which are really to be avoided unless there's no other recourse), there's no reason to worry about net value. Just accumulate more shares at a cheaper price, and you'll have a much better growth than the next time there's a bull market.

 

[BooneRebel]

Originally posted by: FettsBabe
What I put in every four months is lost due to the losses I have suffered every four months in the stock market. I have moved 60% of my new contributions to bonds (5% return). Yes, that is low, but it is the only thing that stopped me from losing $100 over what I actually invested the last four months. The other 40% is in the stocks.

When I see that the stop market has increased (a small amount) then I will shift my money back to those accounts. Then I can gain with everyone else, but lose less money in the process. The stop market won't go up 2600 points overnight, so when I start to see a small increase I will shift my money back to the stocks.

I call it the rhythm method!!! :0

You will lose more money this way. By shifting away from stocks while they are down and buying again while they move up then you've lost more than if you had just stayed where you were.

Let's look at a really extreme example. Say you have $1000 to invest in company X. X stock trades for $20/share so you buy 50 shares on Monday. Tuesday the stock drops to $10/share. You think, "I'm outta here!", and sell your stock. Now you have $500 (taking a $500 loss) and put it into a savings account, but congratulate yourself for getting out when you do. Wednesday the stock rebounds and is now trading at $25/share. You think, "Wow, the market has recovered!" and buy X stock again. You now own 20 shares valued at $25/share, or $500 total.

The same week I invest a matching $1000 in company X at $20/share. Tuesday I grimace as the stock falls but I stand firm and hold my 50 shares. Wednesday when the stock rebounds I'm now holding 50 shares valued at $25/share, or $1250.

At the end of the week, you've taken a net loss of $500 while I've gained $250 profit, solely because you jumped when it dropped and bought when it climbed. The rule of thumb is buy low, sell high. Not the other way around.

 

[FettsBabe]

I understand your position, but I'm not holding stock certificates. This is the 401-k options which are bought and sold by agents of MI Trust.

While I am losing my net value on paper it is almost equal to what I contributed, so I see it as burning the money I set aside to buy.

Yes, I accumulate more shares, but the value is going down. Chances are I will shift my stock percentages again when I think the market has hit the bottom of the barrell because that is the best time to buy because it usually has no where to go but up (we could only pray!). Once I do that I'm still buying low and selling high. I also will have been accumulating a 5% return on 60% of the money I put in the fund, so instead of breaking even with my contributions during this time period I will actually have a 5% return (or close to it) to also buy stocks with when they are low.

 

[rh71]

Originally posted by: BooneRebel

Originally posted by: FettsBabe
What I put in every four months is lost due to the losses I have suffered every four months in the stock market. I have moved 60% of my new contributions to bonds (5% return). Yes, that is low, but it is the only thing that stopped me from losing $100 over what I actually invested the last four months. The other 40% is in the stocks.

When I see that the stop market has increased (a small amount) then I will shift my money back to those accounts. Then I can gain with everyone else, but lose less money in the process. The stop market won't go up 2600 points overnight, so when I start to see a small increase I will shift my money back to the stocks.

I call it the rhythm method!!! :0

You will lose more money this way. By shifting away from stocks while they are down and buying again while they move up then you've lost more than if you had just stayed where you were.

Let's look at a really extreme example. Say you have $1000 to invest in company X. X stock trades for $20/share so you buy 50 shares on Monday. Tuesday the stock drops to $10/share. You think, "I'm outta here!", and sell your stock. Now you have $500 (taking a $500 loss) and put it into a savings account, but congratulate yourself for getting out when you do. Wednesday the stock rebounds and is now trading at $25/share. You think, "Wow, the market has recovered!" and buy X stock again. You now own 20 shares valued at $25/share, or $500 total.

The same week I invest a matching $1000 in company X at $20/share. Tuesday I grimace as the stock falls but I stand firm and hold my 50 shares. Wednesday when the stock rebounds I'm now holding 50 shares valued at $25/share, or $1250.

At the end of the week, you've taken a net loss of $500 while I've gained $250 profit, solely because you jumped when it dropped and bought when it climbed. The rule of thumb is buy low, sell high. Not the other way around.

Very well explained, but sometimes I wonder if stock brokers earn their riches by giving obvious (even to my financially-retarded mind) facts like this. No offense to you of course.