Sure, it's hard to keep one's cool when everyone else is panicking. But selling into a sell off is simply a game of musical chairs with the seller hoping he/she can get out before the market reaches bottom. But think about that. Are these panicky sellers going to be smart enough to figure out when to start buying again?
Look at all of the money that has been taken out of the market in the last few days. All of those sellers are now sitting on piles of cash, and they've got to do something with it besides hide it under the mattress. Interest rates are low and not likely to go up any time soon, so most of those sellers will eventually reinvest in the market.
By the way, it's hard to escape the correlation between the market decline and the conviction that Mr. Obama is Mr. inevitable. Let's take a look back in time. Remember that big bull market that started shortly after the Republicans took over the House and Senate in 1994? There was a realization that with neither party controlling both houses AND the White House the outlook for government messing with business was sharply reduced. And a bull market ensued.
At least one contributing factor for the present market decline is that investors are scared to death of the thought of Barack Obama with all his anti-business baggage in the White House. Add Harry Reid and Nancy Pelosi to that package and we have a very formidable threat to the economy.
Well, maybe the future doesn't look that bright after all, but I'm not about make a mid entry flip flop. I'm holding onto stocks and holding out for a McCain/Palin victory. And if your retirement funds are invested in the stock market in any form or fashion either directly, in a 401k plan or a pension program, then this is as good a reason to vote for McCain/Palin as anything the most highly paid political consultant could ever come up with.
I would note that the only good day the stock market has had in the last two weeks was the day AFTER the House voted down the bailout the first time around.
Go figure.
Posted by: Redman | October 10, 2008 at 02:10 PM
A telling observation, Redman.
Posted by: Geo | October 10, 2008 at 04:14 PM
These bailouts are killing us. Everybody needs to get a GRIP. I'm not sure a little correction wasn't needed, anyway.
(as she mildly freaks, watching her 401K taking a flying leap off the mountain)
Posted by: Janie | October 11, 2008 at 10:00 AM
Oh I know, Janie. My IRA needs a parachute, just a plain cloth parachute -- doesn't have to be golden. Maybe just my per capita share of that $700B. Is that too much to ask?
Posted by: Geo | October 11, 2008 at 10:29 AM