I don’t understand the market, but it sure seems to cycle up and down when nothing changes much either way out in the world.
I think that most of us don’t understand the markets either. I’ve had the chance to discuss this with some long term investors and they have some interesting views. Most of which center around how the markets are manipulated.
And to be honest there isn’t just one or two manipulators, there are hundreds if not thousands of them. Each of them playing their game with the others. And if you aren’t a member of that club, well then you are at best the sucker to be fleeced.
My advice for what that is worth is to stay out of the day-trading and the penny stocks. If you want to invest look for a company that actually makes something or at the least has a product that is bought and sold. Buy it and hold it long-term and just ignore the market fluctuations. You’ll save a lot of money on Maalox that way.
Txrefugee is right.
Brokers these days make money by TRADING, not by making investments.
And since the public has been trained to think that UP in the market is always good news, young money-hungry traders have a vested psychological interest is selling up.
Then they sell off and take a bit of profit, then sell up again. It’s not entirely unlike realtors in the bad old days flipping properties, the proceeds of which were based on speculative prospects and upselling too.
The traders especially can make trades (thus money) on mostly bogus “good news” like the latest European Union popinjay promising “great resolve” in addressing the Euro debt crisis, or our own Federal Reserve planning to print and spend more money in the bond markets, etc., supposedly “easing” the cost of credit and investment (while really only debasing our currency and increasing the likelihood of an eventual financial panic and crash).
Party on! is the motto of the stock market and the people who sell it. They (and we) can all deal with the hangover later...or perhaps sooner.