All major indexes in correction, off more than 2%

cnbc.com ^ | September 1, 2015 | Evelyn Cheng & Jenny Cosgrave

[John W]

U.S. stocks fell nearly 2 percent or more on Tuesday, the first day of trade for September, as weak Chinese data pressured global markets.

The Dow Jones industrial average traded about 400 points lower, still in correction, after briefly falling more than 425 points. The Nasdaq composite wiped out gains for 2015 and struggled to stay out of correction.

The index traded about 2 percent lower, while the S&P 500 fell more than 2 percent and was briefly in correction territory.

[Signalman]

Actual Title of article:

All major indexes in correction, off more than 2%

[boycott]

So I am taking it that this isn’t “Recovery Summer.”

Get that sorry azz community organizer out of there.

[Leaning Right]

One result of all this will be no rate hike in September. Sorry, all you savers.

[John W]

Maybe be different in five more minutes.

[grania]

One result of all this will be no rate hike in Sept. Sorry, all you savers

For many of us retirees, we're surviving. The problem is that instead of balancing our budgets with interest from savings, we're spending the principal. That's going to cut down small inheritances the middle class often got from parents and cut back on money spent on grandchildren, local economies, and housing equity (reverse mortgages). Meanwhile, younger generations have less incentive to save since there's no "power of compounding".

I don't understand how the middle class can recover, for at least the next two generations.

[Leaning Right]

Good post. As a related problem, the government is deliberately understating the rate of inflation via various accounting tricks.

So seniors are not seeing their social security checks increasing nearly as fast as their grocery bills.

[PoloSec]

My guess is if there is not a significant recovery by the end of day, then tomorrow will be brutal, if that happens I don’t think we will see the same recovery as we saw Aug 25 to Aug 27, if at all for a long time, (again it is my best guess) it has been repeatedly demonstrated there are a wide variety of props, plugs and expedient fixes available some maybe we have yet to see.

[Old Sarge]

That's going to cut down small inheritances the middle class often got from parents and cut back on money spent on grandchildren, local economies, and housing equity (reverse mortgages).

And that's the idea: together with the death tax, there is no private ownership - there is only The State.

[Patton@Bastogne]

I guess the PPT (Plunge Protection Team) called in sick today ... LOL ...

[AngelesCrestHighway]

How low can you go...?

[RayChuang88]

The possibility of DJIA dropping to 12,000 may not be far-fetched. Mind you, at that point all those bargain hunters with US$4.5 trillion in liquid assets will jump in to buy stocks of big-time companies at depressed prices.

[ryan71]

September and October are going to be interesting.....

[Roos_Girl]

Good for us, working on a refi of our 30 year to a 15 year mortgage. We’ll have essentially the same monthly payment if the rate stays low enough.

[Lou L]

Meanwhile, younger generations have less incentive to save since there's no "power of compounding".

The "power of compounding" still occurs. For those who invest regularly and use a dollar cost-averaging strategy, the recent slumps in the market represent a buying opportunity--the ability to but stocks, mutual funds, and ETFs at a discount. They're getting more shares for their money now, and the accumulation of shares is where the real "compounding" occurs.

The markets don't always go up.

[grania]

That's fine for people who understand the stock market. Many people just don't have the interest and/or aptitude to thrive in that environment. For a lot of people, they like those FDIC-insured savings. For myself, I've dabbled in the stock market, but am uncomfortable playing now, as nothing makes much sense where it's rigged. The other issue is the lack of small caps that are publically traded, growing, and thriving.

What you gave is the argument that everything is fine, for those in the upper-echelons who choose a good broker. For the middle and lower middle classes, it's what they can do on their own, and the stock market is not where they should be playing with their often meager life savings.

[Lou L]

What you gave is the argument that everything is fine, for those in the upper-echelons who choose a good broker. For the middle and lower middle classes, it's what they can do on their own, and the stock market is not where they should be playing with their often meager life savings.

No, I'm not saying things are fine. There are fundamentals to this economy that don't please me, but I don't think there are many good alternatives. My previous answer was my recommended approach for long-term investors in the market, whether they be middle-class or other. Dollar cost-averaging doesn't require a good broker...for mutual funds, it doesn't require any broker, only that one set up systematic deposits into the fund. You can do that online or through the mail. When markets are going up, you buy fewer shares; when markets are going down, you buy more shares for the same money.

Perhaps there will come a day when the interest rate environment is more friendly to "bank-savers," where you can invest in CD ladders and long-term deposits, but that environment hasn't been around in a long time.

It's my belief that it is essential for every financially responsible adult to understand a little bit about how the stock market works. Certainly, they should understand whatever they're invested in, be it stocks, bonds, or certificates of deposit at their bank.