Dow down 1,000, should we be worried ?

[Ulic]

Stocks go up, stocks go down, same as always. Every prediction of them going up or down has come true. The question is the timing. You only make money of loose money when you sell. Everything else is theoretical. If you have time and nothing better to do with your money just wait patiently, they will go back up. When, I have no idea. 

[Skeptic7]

NO market goes straight up. This is a normal, healthy correction. Even recessions are normal and healthy...and unavoidable. Stand firm and invest more if possible. Peaks and valleys, while the trend is up Up UP. Don't fall into the "sell low" trap. Here's a 40 year DOW chart and 20 year S&P 500 chart, for some perspective. 

 

 

 

 

 

Edited November 21, 2018 by Skeptic7

[Brunolem]

5 minutes ago, Skeptic7 said:

NO market goes straight up. This is a normal, healthy correction. Even recessions are normal and healthy...and unavoidable. Stand firm and invest more if possible. Peaks and valleys, while the trend is up Up UP. Don't fall into the "sell low" trap. Here's a 40 year DOW chart and 20 year S&P 500 chart, for some perspective. 

 

 

Or it can also be that...

 

 

[Skeptic7]

3 minutes ago, Brunolem said:

Or it can also be that...

 

 

Nice one! An ugly chart fo sho, but the OP asked about the Dow Jones Industrial Avg, not Japan. I included a much broader range of US stocks with the S&P 500 as a bonus. The charts speak for themselves. The USA is not Japan. 

[digger70]

One shouldn't play with money what one can't afford to lose, So if one is worried one shouldn't have played.????

[weegee]

Sorry Simoh....November has arrived.

[Skeptic7]

2 hours ago, brianp0803 said:

During Obama I think I lost about 20% but gained it back and more under Trump

Um...WHAT?!? Obama had the 2nd highest cumulative market returns ever...as well as 2nd highest annualized returns ever. Of course the Trump years aren't over yet, but if you managed to lose money during the Obama years...you need to get a big mattress and forget about investing.

 

[1FinickyOne]

this is a period of high volatility... another correction. Isn't it typical for markets to correct a couple of times a year? It seems things move faster these days - been some quick corrections and back... also, 1000 points at 25,000 is not what it was at 15,000... % wise. 

 

Shuffle the cards and deal... futures this morn are up 130... a China trade deal and we will be back at profit for the year... 

[Tug]

To put it simply yes bee worried tariffs isolationism trade wars deep debt without a practical way to pay back unless you Robb the middle class an incompetent president yes be worried deeply worryed (I hope I’m wrong!)

[Lacessit]

I don't particularly care. As long as my blue-chip Australian shares keep paying those juicy fully-franked dividends with a grossed up yield of 7-8% pa, why should I?

The US is different, many are in the sharemarket hoping for capital gain. The shorts try to kick a share further downhill. It's more of a casino there.

[johnnysunshine]

I would consider strengthening your positions on heavy metals and organic farmland...and be prepared for huge drops in the market.

[Mansell]

3 hours ago, xylophone said:

On the face of it you may well think that, but then again what has been your long-term gain/return since you first invested in these indices, and how long has it been and what was your anticipated duration?

 

You may well find that over the time you have been invested, you have made "good returns" and now is just yet another one of what the market often does, a correction.

 

I will add a rider to that, inasmuch as IMO we have the potential gatherings of a "perfect storm" this especially when I read the following this morning in the NZ Herald, which frightened the bejesus out of me as I thought we had learnt a lesson from the last CDO fiasco...….

 

"Indeed, as Bloomberg Opinion's Noah Smith points out, nonfinancial corporate debt has just hit an all-time high as a share of the economy. And, as you'd expect when so many loans are being made so quickly, a lot of it looks quite risky. Companies that already have a lot of debt have been some of the biggest borrowers recently - the $1.3 trillion "leveraged loan" market. But, despite that, there's been so much competition among lenders to make these loans that they haven't been requiring a lot of protection for themselves if things go bad.

 

In a certain foreboding sense, that's understandable. That's because, by and large, they aren't holding onto these loans themselves but are rather bundling them together into securities known as "collateralized loan obligations" (CLOs) to sell to investors. That, thanks to the magic of modern finance, lets them turn a big chunk of their BBB-rated corporate loans into AAA-rated bonds, since there should be safety in numbers: Any single borrower might default, but the chance that most of them would at the same time should be negligible. At least it is according to their mathematical models, which, as we know, are never . . . never mind".

 

If you are in for the long term and another 10 years or more, then staying put may well be a good option but then again only you can decide how much risk you can bear, and even if you want to do it?

The quote you copied here seems very similar to the 2008 crash. Very similar in ridiculous lending hoping everybody doesn't default at the same time. If the guidelines/controls had been left in place on these financial institutions we wouldn't be heading for the same disaster within a decade. Nobody seems to learn from past experiences. After the last one I had older guys knocking on my door in Santa Monica selling insurance because they lost everything in the crash.

[Brunolem]

4 minutes ago, Mansell said:

The quote you copied here seems very similar to the 2008 crash. Very similar in ridiculous lending hoping everybody doesn't default at the same time. If the guidelines/controls had been left in place on these financial institutions we wouldn't be heading for the same disaster within a decade. Nobody seems to learn from past experiences. After the last one I had older guys knocking on my door in Santa Monica selling insurance because they lost everything in the crash.

Unfortunately, financial institutions know what they are doing.

With the help of the central bank, they inflate massive bubbles, luring small investors with the expectation of quick and easy profits.

Then, when the bubbles are big enough, and again with the help of the central bank, they pop them.

They take a hit, but they know that the central bank, and the corrupt government, has their back.

Meanwhile, the small guys without these protections lose everything.

Then, these same financial institutions arrive with the fresh money (bailout) offered by their protectors and buy the small guys' assets for pennies on the dollar.

Inflate, pop, repeat...about every ten years since 1987, and you get the most massive transfer of wealth, from the little guys to the already rich, in history!

This is how the middle class is quietly and relentlessly erased, and a new form of feudalism is born...

 

[Nyezhov]

2 hours ago, Skeptic7 said:

Um...WHAT?!? Obama had the 2nd highest cumulative market returns ever...as well as 2nd highest annualized returns ever. Of course the Trump years aren't over yet, but if you managed to lose money during the Obama years...you need to get a big mattress and forget about investing.

 

Lots of companies did well under Obama. Smith and Wesson, Ruger.......

[Skeptic7]

9 minutes ago, Brunolem said:

Unfortunately, financial institutions know what they are doing.

With the help of the central bank, they inflate massive bubbles, luring small investors with the expectation of quick and easy profits.

Then, when the bubbles are big enough, and again with the help of the central bank, they pop them.

They take a hit, but they know that the central bank, and the corrupt government, has their back.

Meanwhile, the small guys without these protections lose everything.

Then, these same financial institutions arrive with the fresh money (bailout) offered by their protectors and buy the small guys' assets for pennies on the dollar.

Inflate, pop, repeat...about every ten years since 1987, and you get the most massive transfer of wealth, from the little guys to the already rich, in history!

This is how the middle class is quietly and relentlessly erased, and a new form of feudalism is born...

 

Some real fear mongering going on here. Ridiculous to paint with such a broad stroke. First hand knowledge because I was a little guy in the middle class, with a negative net worth, just 30 years ago. Steady, sound, no-panic dollar-cost-averaging INVESTING in quality companies and funds, over the long term, has changed that. And although I still consider myself and conduct myself as a little guy in the Middle Class...the numbers say something different. Top 11% net worth in the USA and top 1% globally. All the fault of the horrible scam you describe above. 

 

Just takes a bit of homework, discipline and living within ones means. Take advantage of the setbacks and use them as buying ops. Equities On-sale! The US Stock Markets are arguably (probably) the greatest wealth building investments of all time...and available to all, not just the rich. 

[kevin612]

Most likely it will drop to 15000 and then go back up to history high again. Stocks are for the rich people.

[chicowoodduck]

In the words of Alfred E. Newman....."What, me worry?"

i pulled out of the market years ago and still have a smile and a few $$$$$& in the bank......????

[Thailand J]

52 minutes ago, chicowoodduck said:

i pulled out of the market years ago and still have a smile and a few $$$$$& in the bank......

In the last few years you could have picked any US indexed fund and doubled your money. You have missed the biggest stocks rally in the last 9 years.

In 2012/2013 I put a large sum into Vanguard VYM ETF, I have just sold it for twice the money.

With the rising interest rate the stock market party is over. Good bye double digit yearly returns. Looking forward I will be happy just be able to keep up with inflation.

Edited November 21, 2018 by Thailand J

[xylophone]

11 hours ago, Mansell said:

If the guidelines/controls had been left in place on these financial institutions we wouldn't be heading for the same disaster within a decade.

Agree and I was appalled when the orange muppet decided to ease the regulations covering lending institutions to let them "self govern" again, which is exactly why the GFC occurred...…idiot.

[Lucky mike]

Damm I sold too early ?

[xylophone]

Something to consider...……….

 

If you had purchased $1,000 of shares in Delta Airlines 5 years ago, you would have $49.00 today!  If you had purchased $1,000 of shares in AIG  5 years ago, you would have $33.00 today.  If you had purchased $1,000 of shares in Lehman Brothers 5 years ago, you would have $0.00 today. 

But, if you had purchased $1,000 worth of beer one year ago, drank all the beer, then turned in the aluminium cans for the recycling refund, you would have received $214.00.  Based on the above, the best current investment plan is to drink heavily & recycle.  It is called the 401-Keg. 

And as a bonus… 

A recent study found that the average American walks about 900 miles a year.  Another study found that on average Americans drink 22 gallons of alcohol a year.  That means that the average American gets about 41 miles to the gallon! 

[Brunolem]

10 hours ago, Skeptic7 said:

Some real fear mongering going on here. Ridiculous to paint with such a broad stroke. First hand knowledge because I was a little guy in the middle class, with a negative net worth, just 30 years ago. Steady, sound, no-panic dollar-cost-averaging INVESTING in quality companies and funds, over the long term, has changed that. And although I still consider myself and conduct myself as a little guy in the Middle Class...the numbers say something different. Top 11% net worth in the USA and top 1% globally. All the fault of the horrible scam you describe above. 

 

Just takes a bit of homework, discipline and living within ones means. Take advantage of the setbacks and use them as buying ops. Equities On-sale! The US Stock Markets are arguably (probably) the greatest wealth building investments of all time...and available to all, not just the rich. 

The average Joe is not in investing, the average Joe is in credit cards, buying things he doesn't need with money he doesn't have.

 

The average Joe has accumulated more debt than before the 2008 crisis, and his children have accumulated an historical amount of student debt.

 

One doesn't make stats out of one's personal situation.

 

The stats say that 3 Americans own as much as the lowest half of the population (160 million people!).

 

The stats say that all the wealth created since the previous crisis has gone into the pockets of the top 5% of the population, all of it!

 

The stats say that 38% of the working Americans make less than 20,000 dollars a year!

 

Finally, the financial markets do not reflect the economic reality, but the monetary policies of the Fed.

 

And these policies are unsustainable because their cost increases exponentially from one crisis to the next, with 2008 beating all records...until now...

Edited November 22, 2018 by Brunolem

[Peterw42]

To put this in perspective, the Dow was 24,800 on the 2nd Jan 2018 and today 22nd Nov 2018 its 24,460.

That is no gain for the whole of 2018 !

[fifelad55]

Time to get rid of Chump and his vice, Pence?

[simoh1490]

3 hours ago, Peterw42 said:

To put this in perspective, the Dow was 24,800 on the 2nd Jan 2018 and today 22nd Nov 2018 its 24,460.

That is no gain for the whole of 2018 !

I don't think the Dow is a very good indicator, for US markets the Nasdaq is a better guage and that's up 1.53% on the year, the S&P however is down 6.09% 

 

"The Dow Jones industrial average is the most widely followed U.S. stock index, but it may not be the best barometer of the equity market out there. ... The S&P 500, on the other hand, is a much better representation of the overall stock market."Feb 8, 2018

 

https://www.cnbc.com/2018/02/08/why-the-dow-isnt-the-best-index-to-follow-the-stock-market.html

 

And if we look at overseas markets elsewhere in the world they are mostly all down over one year between 5% and 15%, that's significant.

 

https://www.bloomberg.com/markets/stocks

[XDoodlebugger]

2 hours ago, fifelad55 said:

Time to get rid of Chump and his vice, Pence?

Because higher taxes and more regulations would cure what ails the market? Hardly. 

[Lacessit]

17 hours ago, johnnysunshine said:

I would consider strengthening your positions on heavy metals and organic farmland...and be prepared for huge drops in the market.

The term heavy metals is used for environmental pollutants such as lead, mercury and arsenic. Noble metals refer to value hedges such as gold, platinum and palladium. I assume you meant the latter.

[Brunolem]

28 minutes ago, Lacessit said:

The term heavy metals is used for environmental pollutants such as lead, mercury and arsenic. Noble metals refer to value hedges such as gold, platinum and palladium. I assume you meant the latter.

Precious metals in fact...

 

Maybe Johnnysunshine is suggesting to store heavy metal in the shape of LPs from Black Sabbath, Metallica, Iron Maiden and the likes...could be more useful than lead or mercury...

 

[Lacessit]

2 hours ago, Brunolem said:

Precious metals in fact...

 

Maybe Johnnysunshine is suggesting to store heavy metal in the shape of LPs from Black Sabbath, Metallica, Iron Maiden and the likes...could be more useful than lead or mercury...

 

Precious or noble, OK. I call them noble as a result of my training.

Sorry, but my musical tastes don't extend to the weirdness of yours.

[Thailand J]

9 hours ago, Peterw42 said:

To put this in perspective, the Dow was 24,800 on the 2nd Jan 2018 and today 22nd Nov 2018 its 24,460.

That is no gain for the whole of 2018 !

Dow was at 17,800 3 years ago.

I remember 9 years ago in 2009 Dow briefly dropped below 7000.