Posted on 02/08/2018 2:12:16 PM PST by CincyRichieRich
I'm an investor, and like most here, overwhelmed with the sources to read, the Q Anon stuff, the stimuli, the conspiracies...and now, a few days of stock market drops - including today's 1000 pt drop. I'd like to discuss with anyone who will participate, as to causes, where from here, etc.
"As you may have seen already, the market tanked again in late trading, down over 1000 on the Dow for the day and all major indexes are in correction territory (10% down from highs).
The reason for the decline and increased volatility is because there has been a lot of good economic news believe it or not, including record low unemployment claims, Atlanta Fed Res forecasting 5% GDP growth in 1Q18, strong manufacturing reports, wage growth increasing, most companies beating earnings expectations, etc.
Why is good economic news bad for stocks (in the short term)? Investors believe that this increase in economic activity will cause the Fed Reserve to become far more aggressive on raising rates than previously believed and that bond yields will continue rise – perhaps sharply. This, combined with a market that hasn’t really taken a break since Nov 16 election, is causing the rapid pullback. We’re still just above several key technical levels (including 200 day average) so we could easily bounce back quickly or break through and drop another 10%.
It’ll probably be bumpy for at least a few more days."
Dividend stocks with decent payouts that re-invest is the way to go. The stock price fluctuations are good and bad, good when your dividends re-invest, but bad if you have to sell the stock. You fix this by only selling the stock when it is good. If the value dips, your re-investments can buy MORE shares and this grows your dividend. It starts slow, but after a while really begins to add up.
It's irrational.
It goes up and down without close correlations to what's going on in the world.
There's a lot of money to be made if you can predict the fluctuations or make it go up and down.
How do deficits affect corporate profits in the next few years ahead or so? Could you please explain that for us?
I was waiting for this 2nd dip to buy.
You only really lose when you sell lower than you paid for a stock, I say hang in there, I heard today that 90% of the trading is computer trading, it’s painful to watch but the economy is better than its been in years imho
The valuation of a company, the valuation of a piece of real estate. How is that so irrational? Aren’t there general yardsticks of fundamental value that a person or an investor can use to intelligently determine what is a reasonable fair market value? How is that gambling?
My favs? D, CVX, UNP, P, XOM, JNJ, AAPL, MSFT, INTC, HD, PG, maybe GE.
What do all these have in common? China and Soros can't manipulate them....as much. + a nice juicy dividend.
Regional banks? Maybe SFNC or BBT.
I love the drops, but sometimes you catch a falling knife. Oh well, I'm only 47.
Everyone knows that markets reflect confidence and uncertainty causes market disruption.
My theory is that Trump and his team have intentionally been slow-walking the release of information because if he went on national TV and laid out the full extent of corruption in government, stock prices would fall so fast it would make Black Friday look like a bear. Yet the information IS going to come out, it has to, so they’re testing with controlled releases to gradually condition people (including investors). What we saw since last Friday is proof of market resilience. That will be important moving forward, because this cannot be a bump-free ride. But if confidence is not lost, the bumps will be smoothed out over time.
Investors waking up to the fact that interest rates are going to rise significantly after being held artificially low during the Obama era in a desperate attempt to keep his economy from going into the ditch completely - stock investors will come back once it dawns on them again that they can still get more long term growth in equities than in debt......
And that includes 1929, and the stuff in the 80's.
The thing is, you have to be in it for the long haul.
If baby boomers are that heavy into stocks at their age, they deserve to get screwed.
I have a BBA in Finance and 35 years of stock trading experience. Here are the four most important things that I know about the stock market:
1. Anyone who says that they know what the stock market will do tomorrow or next year is either lying or clueless. If you knew what the stock market will do over the next year you could easily retire as a billionaire at the end of the year.
2. If you pick a portfolio of stocks entirely at random you will do better than 50% of all professional money managers.
3. If you park your money in a low fee broad market index fund and leave it there for 20 or 30 years, through bull markets and bears, you will average about an 8% annual rate of return compounded annually every year.
4. If you are thinking of day trading (flipping stocks all day long) you would do better going to Vegas and playing roulette. At least in Vegas you can get drinks and take in a show.
Yell at Obama’s Yellen.
She carefully ran up the markets and the air is about to come out as she’s no longer holding the somewhat overinflated bag.
Pump and dump Joe Kennedy would understand it all very well.
A correction is underway.
She didn’t overdo it as much as Greenspan so the fallout won’t be nearly as bad.
Fear of the Federal Reserve raising interest rates.
A long time since the last correction.
Profit taking.
Otherwise, the economy itself should do very well.
You bring up a good point. One of the worries of wall street is the shrinking amount of equity from buy backs of stock. Cash flow for many companies is so strong they aren’t just buying back stock, but rapidly increasing their dividends. Furthermore, the new tax cut makes that an even stronger case. America’s appetite for investment into equity is stronger than business creation is providing. That is extremely BULLISH for US small business. Think start up...
I’ve heard that theory all day and I just don’t get it. The crypto market is not that large...it’s a small tail wagging a huge dog.
Sure, I bet there are a few folks hurting in the crypto world. But hardly anyone would be hurt so bad as to affect the NYSE.
the markets are worried about inflation...and the havoc it brings
But what you don't see in the MSM...but it's underneath and stinking is what is happening in the deep state.
I think many savvy traders are aware of what is happening..and they may be left or right...but they pay attention. And uncertainty...is not a good thing in the "M".
Gotta love it when stocks go on sale! I say it is just about time to BUY!
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