# Stock Market Takes A Dive.



## sleecjr (Mar 24, 2006)

The market made a big move down today. I know it doesn't cost any thing until you sell, but still it was a shocker.


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## Crawfish (Sep 14, 2005)

Lee, It still makes me sick to see how much money I lost on paper, and the DW's 401k.







I know it will be back. I invest for the long run.

Leon


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## Carey (Mar 6, 2012)

I'm sure my 401k felt it, from the news there may still be some ways to go yet.. Hope not, my 401k has been kicking ***.. But yep, in it for the long run..

Carey


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## FraTra (Aug 21, 2006)

I have been paying into 401(k)s for over 20 years! I am afraid to login and see how much I lost today. A friend of mine was a couple of years away from retireing then 9/11 happened and now he is semi retired and working part time. He lost huge.


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## N7OQ (Jun 10, 2006)

Man did I luck out on this one. I had a very large 401K with Kodak that I just rolled over last week into a personal IRA and I put all the money into a safe harbor account until I could get with my sister who is CFP and figure out were to invest it.

But like every one is saying I'm in it for the long term. When 9-11 happened I left my 401k alone while one of my co-workers who had 2 times the money in his account put his in a safe harbor account. Now before he could move the money the damage had already been done. I kept buying stocks like nothing happened while he kept his invested in the low interest safe harbor account. When we Closed down the plant a few years later I had 2 times more money then he did.


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## emsley3 (Feb 27, 2007)

I know that there are many factors to take into consideration during a decline like today, including the activities of the foreign markets. However, it seems like whenever Mr. Greenspan opens his mouth the market takes a dive. Seemed to happen when he was in control of the Fed and appears to still happen even though he has left.

The only good news about a market dive is that a ton of investors will turn to real estate and should drive my waterfront property at the coast through the roof.

Just sit tight and see what happens.


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## LarryTheOutback (Jun 15, 2005)

FraTra said:


> A friend of mine was a couple of years away from retireing then 9/11 happened and now he is semi retired and working part time. He lost huge.


This is a good reminder that as you get closer to retirement you should be rebalancing your portfolio away from stocks and into bonds; this is usually something you'd do on an annual basis. There are actually mutual funds out there that do that for you automatically (some are called "Life Stage" funds); you pick the fund based on the year you will be retiring.


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## sleecjr (Mar 24, 2006)

emsley3 said:


> The only good news about a market dive is that a ton of investors will turn to real estate and should drive my waterfront property at the coast through the roof.


Be careful what you wish for. I have some property in south Florida. In the building boom of the last few years it went through the roof. So did the taxes. Then the real estate market took a hit and values went down a lot, but the taxes didn't. I now pay 8 times the taxes i did when i purchased it. It was still a great investment, but i should have sold it when the market was good. Now that the taxes are up and the value is down every is selling. It makes it very hard to sell, unless its cheap.


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## emsley3 (Feb 27, 2007)

Very true statement sleecjr. I know several people in the exact same boat that you are in. In their situations, they got too greedy and it will now cost them dearly. My real estate investements are only 6 - 12 month investments and then I will take whatever profit I can given the market value at the time. I would rather close 8 single transactions with $25k profit each than go for the big one with a $200k profit. I just feel like it helps limit my long term financial exposure should the market take a dive.


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## Scrib (Jun 28, 2005)

I was short the Nasdaq 100 - no kidding.


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## JimBo99 (Apr 25, 2006)

Why has the stock market gone up?

After the crash caused by 911 the Greenspan Fed pumped trillions of dollars that were created out of thin air into the economy by several means. They lowered interest rates to 1%. This attracted speculators who borrowed the money into existence, who bought stocks, commodities and whatever else on margin or with loaned money directly. This excessively pumped up stock prices.

Speculators borrowed money to buy land and houses to flip. This drove up housing prices. As the houses in the neighborhood climbed to the stratosphere, the other home owners saw their house values rise dramatically. It was too much temptation to resist borrowing out the added equity spend on comsumer goods, vacations and other services, college tuition and even everyday expenses. 70% of the economy is from conumer borrowing and spending.

As company's saw their stock value increase, they could borrow more money. They borrowed alot, and used it to buy other companies and their own stock. This increased their earnings (bottom line). This pushed their stock prices higher and drew in more speculation. The specuation spiral rose faster and faster.

50% of the trading in the stock market is by hedge funds that have trillions of dollars and they just get in and out to make a buck. No investing here, pure profit motive with no concern about what they are invested in. Another 30% of stock trading is by smaller traders who use a computer program similar to what you see on tv. They all set buy and sell stops to automatically buy or sell at a preset point. this is hot money that comes and goes. It can just as easily exit the US stock market for overseas markets, commodities, bonds or currencies.

I personnaly think think all stock markets are the biggest casinos in the world. As bankruptcies occur these many loans will default and the deluge of money released by the Fed will disappear much faster than it appeared.

Here is an excellent website for learning about what's really going on in the financial world. Especially the Saturday internet radio program. I particularly like the 3rd hour wrapup. http://www.financialsense.com/
Jim


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## sleecjr (Mar 24, 2006)

emsley3 said:


> Very true statement sleecjr. I know several people in the exact same boat that you are in. In their situations, they got too greedy and it will now cost them dearly. My real estate investments are only 6 - 12 month investments and then I will take whatever profit I can given the market value at the time. I would rather close 8 single transactions with $25k profit each than go for the big one with a $200k profit. I just feel like it helps limit my long term financial exposure should the market take a dive.


I totally agree with you. A guy i work with thought he was going to become a real estate Barron. He sold his first house and made 100k in about 1 year. Then he purchased 3 homes, all around the 400 to 500k mark. Well the market crashed, now all of the homes are not worth what he paid. Builders with deep pockets are cutting prices to sell homes. He is going to loose everything.

I got very lucky with mine. I purchased it as an investment. It was deed a restricted 1/2 acre lot in a failed subdivision. When i purchased it, I intended to sit on it for years until the area developed. Well as luck would have it 6 months later they broke ground on 2 country clubs in the area and property values started going up fast. With in 1 year it was at 5 times what I paid and not slowing down. I should have sold it when the market peaked. But i didn't. I am in no hurry to sell. As it will be for Bella's Collage, wedding, first car and things like that. She is not even 1 yet so i think i have some time for it to come back some. I hate paying the taxes, but it is way worth it.


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## emsley3 (Feb 27, 2007)

I agree with Jimbo in regards to "all stock markets are the biggest casinos in the world". I am starting to wonder if I am not better off selling off my stocks, mutual funds, etc. and heading to Vegas. I know I would enjoy it a heck of a lot more if I lost it there.

Lee, you could not have done any better if you had tried. Sounds like you took a very modest risk and it is going payoff very nicely in the end. I am in the same boat with our investments. While I would like to say that they are strictly for retirement, we view them more as a way to setup our kids down the road. Only being 30 y/o helps too as I am not rushed to setup for retirement within the next 10 years. The investments also help nicely with the tuition payments for private school.

Good luck and it looks like the private investors like ourselves are helping the market today. While we all hate seeing money lost on paper, days like to today are great for buying.


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