Posted on 10/15/2014 8:40:24 AM PDT by Citizen Zed
What is capitulation?
In simple terms, capitulation is when investors try to get out of the stock market as quickly as possibleand look for less risky investments. It's also described as panic selling. It's usually based on investor fears that stock prices will fall further than they have.
Capitulation is usually signaled by a decline in the markets of at least 10% in one day.
In getting out of the market, investors give up any previous gains in stock price. That means they take a financial loss, just to get out of stocks. The thinking is: take a smaller loss now rather than a bigger one later.
Real capitulation involves extremely high volumeor high numbers of traded sharesand sharp declines in stock prices.
(Excerpt) Read more at mob.cnbc.com ...
We are far from capitulation. Valuations are still very high considering the general business climate.
Let me know when you can get good companies at 8 times trailing earnings paying a 6% dividend. That’s capitulation!
In my past experience, capitulation always seems to occur at the exact moment when I decide to sell. Not before, not after. Makes me want to cry sometimes.
We are retired and our IRA’s are in index funds (among a few other things. Plus we own hard assets, including our house and a couple of rentals. Up and down the markets go but we are in it for the long haul. We can’t worry about corrections. Life is too short to angst about the daily movement of markets.
I keep telling myself to get out of the market before October and get back in during November.
But I keep forgetting before the next year.
...just like Obola will never reach the US
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.