Wall Street closes out worst week in a decade

[Gefn]

Said all along that the 'correction' last week, was merely year-end profit taking.

Then...the computer algorithm took over.

The media jumped.  They're pulling all the stops to crash this President's administration.

Hope it’s a good thing and not a Dead Cat bounce. (Gosh I hate that term)

[thackney]

Yep.  The market has been seriously overvalued for a few years now.

Do you have any knowledge of the history of the stock market?  For more than a century, the average time to double your money in the stock was 7 years.  The 1930s and the 2000s were rough decades for stock investment.

THE HISTORICAL RATE OF RETURN FOR THE STOCK MARKET SINCE 1900
http://www.stockpickssystem.com/historical-rate-of-return/

[andy58-in-nh]

Well, Wall Street just closed out its best day in history.

Pretty much all momentum-chasing algorithms, but we'll take it.

[Wingnut]

Well, Wall Street just closed out its best day in history.

Pretty much all momentum-chasing algorithms, but we'll take it.

When it falls it is Trumps fault.
When it rocks no mention at all.

[Right_in_Virginia]

STOCKS ROAR BACK
DOW +1,086
BIGGEST GAIN EVER

[Applewood]

When it falls it is Trumps fault.
When it rocks no mention at all.

First of all, while this huge gain is most welcome, it may be just temporary.  The trade war, the government shutdown, the interest rates, overspending by congress.  None of these have been fixed.  Until the problems are solved, any gain will be temporary and the market will drop again.

Secondly, the gain hasn't erased the huge losses which we have been seeing of late, particularly on Christmas Eve.  The Dow is still down for the year.  S&P is still within bear market range.

Another thing -- while the analysts are still pondering the reasons behind this huge gain, it appears that today was a buyer's market, particularly with energy and retail stocks.  Retail sales reports so far have been very positive and it is believed the holiday shopping season went very well.  Investors are taking advantage of the low price on these stocks and gobbling them up.  But after that, then what?  No one knows. 

In any event, it's hard to say that Trump is behind today's temporary gain.  He didn't do or say anything to cause the markets to surge higher.  In fact, analysts noted that today was a slow news day and there wasn't any news to cause the markets to go up. 

[InHeavenThereIsNoBeer]

Do you have any knowledge of the history of the stock market?  For more than a century, the average time to double your money in the stock was 7 years.  The 1930s and the 2000s were rough decades for stock investment.

THE HISTORICAL RATE OF RETURN FOR THE STOCK MARKET SINCE 1900
http://www.stockpickssystem.com/historical-rate-of-return/

I have two very big problems with articles make statements like that.

First, calculating average yearly gains does not reflect overall gains, it overstates them.  If you invest $100 and the stock goes up 20% one year and down 10% one year, the average is +5%.  But that's not the same as 5% gains per year.  You only have $108, not $110.25.

Next, "the market" changes.  This article is the first I've seen that hints that they may have sort of taken that into account, but I'm not seeing any methodology.  When a stock falls out of favor, a market index can simple replace it with a different one (that is probably going up), potentially without any loss of value of "the" overall market.  An individual doesn't have that luxury.

[Fishrrman]

thackney asked:
"If it fell today to 18,500, it would have more than doubled in the past decade (closed $8,515.55 Dec 26, 2008).  How much has your cash grown in the past decade?"

From January 1, 2009 until [what will be] January 1, 2019, it increased by 3.6x. That number isn't "the total", it's what "the growth" was.

I have no money (not one cent) "in stocks" and haven't had since about 2008.

[truth_seeker]

I expect seasoned investors are using this correction, for a buying opportunity.

[IsailedawayfromFR]

 yymouseby

This is very bad.

why?  Did you notice it went up a 1000 today?

Why is a one day drop something to worry you?

[Gefn]

yymousebywhy?  Did you notice it went up a 1000 today?

Why is a one day drop something to worry you?

It was a lot of drop that worried me and today it’s dropping again, as I stated before either on this thread or another I’m afraid yesterday was a Dead Cat Bounce.

Im worried because I have some of my retirement money tied up in the stock market. I’d like to have a secure nest egg.

That comment was made on Christmas Eve before the 1,000 point rally yesterday. Now it’s down again, I know it’s correcting itself. It’s still kinda worrisome to investors, don’t you think?

Anyway, @IsailedawayfromFR best wishes for a great new year

[Applewood]

It was a lot of drop that worried me and today it’s dropping again, as I stated before either on this thread or another I’m afraid yesterday was a Dead Cat Bounce.

Im worried because I have some of my retirement money tied up in the stock market. I’d like to have a secure nest egg.

That comment was made on Christmas Eve before the 1,000 point rally yesterday. Now it’s down again, I know it’s correcting itself. It’s still kinda worrisome to investors, don’t you think?

Anyway, @IsailedawayfromFR best wishes for a great new year

We are not supposed to be concerned because  ------- Trump is king and he is making America great again.  Or something. 

Christmas Eve was not one drop on one day.  It was the latest in a series of drops.  The gains for the year were lost.  We had a big gain yesterday, but as you pointed out, all three markets are down today -- the Dow has lot around 370 points as of this morning. 

The gain yesterday was most likely bargain hunters gobbling up energy and retail stocks -- because, as a result of the recent major losses, these stocks were cheap.  And word is that retail is doing particularly well largely because of holiday sales, so they are a good buy.  But the "clearance sale" yesterday is over and it's back to reality.  The same factors that contributed to the recent losses still exist and they are continuing to impact the market in a negative way.

I don't want to hear stats about how high the market is now compared to last year or 2016 or whatever date these bogus comparisons use.  I'm concerned about the here and now.  And the here and now is not doing well. 

It's unfortunate that so many people don't get it.  Maybe they aren't invested in stocks.   But sooner or later this will negatively impact whatever investments they do have.  A major recession is coming and putting one's head in the sand is not going to prevent it.

[IsailedawayfromFR]

It was a lot of drop that worried me and today it’s dropping again, as I stated before either on this thread or another I’m afraid yesterday was a Dead Cat Bounce.

Im worried because I have some of my retirement money tied up in the stock market. I’d like to have a secure nest egg.

That comment was made on Christmas Eve before the 1,000 point rally yesterday. Now it’s down again, I know it’s correcting itself. It’s still kinda worrisome to investors, don’t you think?

Anyway, @IsailedawayfromFR best wishes for a great new year

one day events mean nothing.

Need to look at trends and fundamentals over years not days or weeks or even months.

You will worry yourself sick otherwise.

[IsailedawayfromFR]

We are not supposed to be concerned because  ------- Trump is king and he is making America great again.  Or something. 

Christmas Eve was not one drop on one day.  It was the latest in a series of drops.  The gains for the year were lost.  We had a big gain yesterday, but as you pointed out, all three markets are down today -- the Dow has lot around 370 points as of this morning. 

The gain yesterday was most likely bargain hunters gobbling up energy and retail stocks -- because, as a result of the recent major losses, these stocks were cheap.  And word is that retail is doing particularly well largely because of holiday sales, so they are a good buy.  But the "clearance sale" yesterday is over and it's back to reality.  The same factors that contributed to the recent losses still exist and they are continuing to impact the market in a negative way.

I don't want to hear stats about how high the market is now compared to last year or 2016 or whatever date these bogus comparisons use.  I'm concerned about the here and now.  And the here and now is not doing well. 

It's unfortunate that so many people don't get it.  Maybe they aren't invested in stocks.   But sooner or later this will negatively impact whatever investments they do have.  A major recession is coming and putting one's head in the sand is not going to prevent it.

you seem to be someone who should stay away from investments altogether and stick to something you understand like perhaps savings accounts, if you are that worried about the 'here to now'

[Free Vulcan]

Markets get overbought. Then they get oversold. Computer algorithms may exaggerate that a bit, but the net underlying effect is the same.

The Christmas Eve drop was on low volume and extended things into ridiculous territory. Notice the big bounce yesterday and followthru today.

If you look at the chart, while the moves in point numbers seem huge, in chart terms not that major at all. 500 points in '87 isn't the same impact as today.

[IsailedawayfromFR]

It was a lot of drop that worried me and today it’s dropping again, as I stated before either on this thread or another I’m afraid yesterday was a Dead Cat Bounce.

Im worried because I have some of my retirement money tied up in the stock market. I’d like to have a secure nest egg.

That comment was made on Christmas Eve before the 1,000 point rally yesterday. Now it’s down again, I know it’s correcting itself. It’s still kinda worrisome to investors, don’t you think?

Anyway, @IsailedawayfromFR best wishes for a great new year

@Freya   Are you still worried since the Dow is up 3,000 points since this post?

If you are, now is a good time to selloff and sleep well at night.

This is not a market that needs people who cannot withstand the ups and downs.

[Gefn]

@Freya   Are you still worried since the Dow is up 3,000 points since this post?

If you are, now is a good time to selloff and sleep well at night.

This is not a market that needs people who cannot withstand the ups and downs.

@IsailedawayfromFR I’m not touching my stocks they are my retirement, and I trust they will be ok. I realize that might sound weird but I feel they should be secure by then. Thanks for asking, I hope all is ok with you.

[Hoodat]

Correct.  Stocks are a long term investment.

[IsailedawayfromFR]

@IsailedawayfromFR I’m not touching my stocks they are my retirement, and I trust they will be ok. I realize that might sound weird but I feel they should be secure by then. Thanks for asking, I hope all is ok with you.

Couple of items here:

In spite of it being in a retirement account, one should nevertheless periodically assess the performance.  It might be that one or more are not keeping up with the others and need some massaging. 

There is no stock which should never be looked at.  For example, look at the venerable stock of General Electric or AT&T if you want to.

At minimum, i'd suggest looking once per year.