Dow 5,000
I’m not hoping for it, but we have 15 years of accumulated fiscal sins to atone for. So if you are waiting for the bottom of the market to invest the ten grand you made playing poker – I’d hold off for a while.
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Jason330 is a deep cover double agent working for the GOP. Don't tell anybody.Comments (12)
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I agree the bottom isn’t here yet, but I don’t think the media can drive the panic that far.
7,200 is my call, but others are saying 7,000.
I think 5,000 is just giving up.
What happened to the Audacity of Hope????
Question: Do I stand to lose more if I roll over my 401K or if I cash it out and pay the penalty and taxes then dump it into an IRA when things start to pick up a bit?
I cashed a 401k once when changing jobs and it was the most expensive money I’ve ever put my hands on.
I think a loan shark would not have been as bad.
The theoretical correct price of a stock is the net present value of all future earnings and dividends. You are buying a stream of cash flows.
Earnings are going to be hurt for some time, as the growth of earnings is a key part of this equation, and right now earnings are dropping and the scope of this whole crisis is putting all earnings assumptions into question.
Once the credit markets settle out there will be a reasonable baseline for what stocks should be worth, and the market will tread water for a while… but I would personally not expect the market to trade near our recent highs for years…
Mr. MBA. You go not Brian!
In theory the market should come back, however the dow flirted with the 500 mark in 1929 but didn`t actually break it till 1956, 27 years later. I fell as an investor the data is looking very 29ish, so the ideal strategy would be to cash out, learn how to trade the market and make up your losses that way. I had one of the best weeks of my life last week by buying short ETF`s. It is definatly a traders market, not a buy and hold market.
Recovery depends on govt not raising taxes as was done after 1929 crash.
Just remember folks the no matter which way the market goes up or down that at the end of each sale there is a buyer. So someone like Buffet who invested in Goldman and GM just might know something.
And as far as the banks go Wells Fargo just bought Wachovia and who was it that bought up Washington Mutual? So my advice for what it’s worth is to sit tight.
TomS,
Tax cuts. Drive up the Natl. debt. Self regulation for banking and financial services. That seems to be working pretty well.
We are in a pit, so we better keep digging!!
Jason-
Not trying to be an egghead about it, but most of what you see in press (even decent business press) does not seem to have been written by anyone who ever could have ever taken an intro finance class.
TomS-
The recovery they had after the 29 crash did not need a tax increase, the reason? Once the government realized it needed to do something they started massive deficit spending, increased taxation would have worked against them.
This time we already had massive deficit spending BEFORE the economy crashed… instead of a current account surplus we have a massive deficit…
We also have a ton of debt at obscenely low rates… the easiest way to get out of this is a prolonged period with a high inflation rate. It will devalue our national debt while affording the government the flexibility of being extra fiscally irresponsible at the front end of the recession….
This whole thing is going to suck…
To Jason’s comment, whether or not we figure out regulation or not, it looks we are going to keep digging…
Question: How many Americans have investments in the stock market?
Maybe I’m the abberation, but I don’t know a whole lot of people who have a ton of money on the NYSE or NASDAQ. One or two coworkers have more than the minimum in their 401(k)s. But most everyone in my circle has simply tucked it away in savings accounts. Retirement means working until you drop dead.
As for investing poker winnings – hah! I’d have a heart attack if I had ten grand on hand. It’s paycheck-to-paycheck, baby.
I’d like to see the media focus more on info that can help those Americans who don’t know a dividend from a downturn, and less on the up-and-down ride of the Dow. (Which, as I understand it, really isn’t representative of the entire market anyway.)