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Have stocks reached rock bottom? opinions please

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Sno.
Posts: 12155 - Karma: 6,152

I know that NS is certainly not the best place to ask for financial advice, but I figure some of you are in college and taking econ classes, and you might have professors filling your heads on a daily basis with sound financial advice that you could pass on...who knows...maybe I'm just writing this without the anticipation of an actual answer, but just because I can't stop thinking about it and writing things out generally helps...who knows.

Opinion....ride the stock market thing out, and expect it to go back up and I'll recover my losses? (down 41% this year, down about 180k)

Or move it to a money market where things haven't been nearly as affected, so that I don't lose the rest of what I have?

???????????????????????????????????

This is a hypothetical situation, I'm asking for one of my roommates. I do not have the above mentioned assets, so don't call me a claimer.

Oct 9 2008 11:38PM
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cottonwoodarmada1651
Posts: 1734 - Karma: 40
You had 400K in the stock market?  Dang...NS is even more upper class than I thought.

I'm no economist, but I'm not personally worried about this crisis.  Don't get me wrong, this is likely the start of a nasty recession if not a depression, but it's not the death of capitalism.  These things happen periodically.  There's no doubt this is going to be a very rough time for a LOT of people, but as somebody's who's 22 with superb job security and benefits and just beginning to invest...well, to be coldly pragmatic, this is gonna work out well for my retirement, I think.
Oct 9 2008 11:43PM
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cottonwoodarmada1651
Posts: 1734 - Karma: 40
Sorry, i missed the disclaimer at the end there.
Oct 9 2008 11:45PM
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SkiingNinja
Posts: 1967 - Karma: 900
well my accounting teacher predicts that if the market bounces  back at all, then the dow will go down to around 8000-8500. thats his advice
Oct 9 2008 11:54PM
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Sno.
Posts: 12155 - Karma: 6,152
no not me, see the roommates disclaimer.
Oct 10 2008 12:13AM
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Perma
Posts: 513 - Karma: 20
i think the worse is still yet to come, which is crazy because were already in such bad shape
Oct 10 2008 12:16AM
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skibum2292
Posts: 398 - Karma: 9
ride it out. people are so worried that they're going to lose their money they're all taking it out and putting in the safest place they know. only problem is when there isn't enough money in the stock market everything else fails, so there is no safe place for your money. i would be conservative with your money in the market and don't make any risky moves. but u should absolutely leave your money in the stock market...if u don't you will lose money anyway. so u might as well get the upward surge the stock market will eventually have.
Oct 10 2008 12:23AM
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Sno.
Posts: 12155 - Karma: 6,152
good advice.

The only thing is, if it completely crashes, my roommates will have nothing!! Right now they could move it all to a safe place, but then again if they do that, the stocks could start going right back up and they'll have locked in a shitty loss.

So yeah, I guess just ride it out.
Oct 10 2008 12:41AM
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futurespin
Posts: 2178 - Karma: 168
It's a good time to be an economic major! Definitely ride it out, consumer confidence is very low right now and people are saving their money. Cnn and other news agencies are always reporting that "the worst is yet to come" or "theres no end in sight" which is driving consumer confidence down. Spending is the key to a better economy and once something happens to trigger higher confidence, people will begin to spend money and GDP will increase. I think right now is an excellent time to invest, and I think with the end of the Bush administration we will see stock prices begin to rise (higher confidence). GDP has constantly been upward sloping since even before the great depression, and while we have had several recessions they are ALWAYS followed by a recovery. Wait it out, the stock market WILL climb back up, its just a matter of when.
Oct 10 2008 12:59AM
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SirFryanator
Posts: 11149 - Karma: 1,415
^ I agree. We will KNOW when the market hits rock bottom, and it will be worse. The economic cycle will follow through, and eventually we will be on the rise again, along with the rest of the world...unless a bailout gets passed.
Oct 10 2008 1:00AM
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tuna.
Posts: 2627 - Karma: 111
i'd agree, ride it out.

but hypathetically, i'd play blackjack, 5 dollar hands would last you long enough to not only dominate every hand, but also to wait out the recession. its full proof
Oct 10 2008 1:01AM
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Sno.
Posts: 12155 - Karma: 6,152

The problem, is when this happens 5 months before your planned retirement, and your retirement funds are in the stock market.

waiting it out will mean more years of work, perhaps many.

Oct 10 2008 1:03AM
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SirFryanator
Posts: 11149 - Karma: 1,415
hardly years. the international market is reacting. hell, the US government is reacting faster than it ever has to an economic crisis like this. I understand the concern, but really what is there that the government can do about it without screwing up any predictable system?
Oct 10 2008 1:28AM
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papasteeze
Posts: 12055 - Karma: 913
if you are in, do not get out.  If you are not in, buy in at 7500.  GM is at $5  wtf!?

I know nothing...
Oct 10 2008 7:46AM
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finnafuckyobitch
Posts: 1647 - Karma: 865
this kid knows whats up
Oct 10 2008 7:51AM
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jfoley019
Posts: 929 - Karma: 95
Being in the 401k world I say ride it out. Don't look at what your account is doing it only makes you more nervous. Especially in a 401k when your put your contribs in (weekly bi weekly...) you are going to be buying in really low. When the market comes back that money you put in when the market was low will become worth more. Remember a 401k is a retirement tool, it is not for day trading.

Just to show you how important to is to save for your future, as figures show at the beginning of these year, 20 somethings have to save more then 1 million to okay after retirement. I suggest if you are working and now in a 401k or a retirement plan, to do so as soon as possible. Find out what your company matchings, find out if your plan is a safe harbor plan.... Educate yourself so you can make the best possible decisions.

In most 401ks they are partic directed, this means that you the participant are able to change your funds when ever you want, you can pick froma  list of funds and so on. There is an agent that can help you with this but still you need to make the trades. So again Educate yourself.

I will not give financial advise but if you need some more info on 401ks please pm me with serious questions.

thanks Jim
Oct 10 2008 8:53AM
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49566738265
Posts: 0 - Karma: 7,704
There are a lot of good posts so far, I like this thread.  Theoretically, you are just fine unless the market actually reaches 0.  This won't happen to you, especially if you have diversified assets (which I would assume with the amount listed above).
Oct 10 2008 9:06AM
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D-HAWK
Posts: 890 - Karma: 10
i'd say start buying if your not already in cause if you look at the history it dips in and out. But it always comes back up stronger.
Oct 10 2008 9:44AM
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DrStrangelove
Posts: 1948 - Karma: 3
BAIL BAIL BAIL, it's going to keep taking a shit for at least a couple more weeks, if not indefinitely. THIS SHIT IS SERIOUS.

but tell the dude to ride it out if he wants to, do whatever, if it were me, i'd cut my losses and watch it fall some more, then buy back in for cheap and hope to make all my money back...

actually, it WAS me 3 weeks ago, and i bailed, and now im sittin around still feelin kinda rich (i only lost like 5%) and im just waiting to buy back in.

i feel bad for my dad though, and i guess myself by proxy, because he's all tied up in a merryl lynch portfolio and he's really getting hammered.

either way, it'll probably turn around within the next couple months. if he rides it out, it'll take at least a few years to make that money back, assuming the dollar doesnt crater, then it'll take way longer. if he bails now and makes some good buys when the rebound comes around, he stands a better chance of getting rich again real fast.

the rebounding market will have huge earnings potential for anyone who still has money left after the fall...tell him what i just said.
Oct 10 2008 11:10AM
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skiminnesota
Posts: 9093 - Karma: 429
well i was just talking to my dad and he is staying in, luckily for him he is still 10-12 years away from retirement..... O his mutual fund has lost 25% of its value.... 6 figures. 
Oct 10 2008 11:38AM
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Maxfreeride
Posts: 1185 - Karma: 13
If you have cold hard cash, I would invest it if you see an upward trend.  That shit will be gold in 10-15 years.
Oct 10 2008 11:44AM
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Sno.
Posts: 12155 - Karma: 6,152
he can't take it out, it's a retirement fund. He can move things around, like move all of his assets to a money market.

I told him pretty much what you just said and he said that, once you move things, you can't move them again for another 30 days. So, if you move all your money, and then the next three weeks we see a huge turn around, he will have lost out on that opportunity.
Oct 10 2008 1:23PM
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Sno.
Posts: 12155 - Karma: 6,152
same. my dad was going to retire in less than a year. I told him, just wait it out and it will go back up, and he said that it took 5 years for his foreign stock account to increase 20%, now it's down 41%, so it could take 5-10 years to make that money back, depending.

It's a possibility for sure though. Man, too bad he didn't retire last October and pull all his shit out.
Oct 10 2008 1:28PM
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papasteeze
Posts: 12055 - Karma: 913
Get ready to buy...   If you have cash...   get ready..  shit is going to get crazy..
Oct 10 2008 1:29PM
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papasteeze
Posts: 12055 - Karma: 913
oil companies are diving...   people are liquidating..
Oct 10 2008 2:07PM
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Ben.
Posts: 21463 - Karma: 683
honestly in the long term, its nothing to worry about. my dads about to pour money into mutual funds and whatnot because the market has to bottom out soon, and at that point people that have just put money in are golden. Im trying to scrape together more money to put into my ira myself.
Oct 10 2008 2:12PM
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ferrinski86
Posts: 774 - Karma: 10
very good thread so far people!

it depends on when you got into the market an how long you want to stay in. like you said (if its for his IRA) STAY in. short term investors are freaking out but long term you will be fine. the market will go back up and if it doesnt you do risk losing everything. this is what most people do is freak out and sell, which is what you dont want to do.

i have lost some money but not alot. i have mutual funds and i do not own more than an 8th of a point in any one stock so i have not been hit that hard. i have not looked into my IRA for awhile now but i am thinking about putting some more money into my IRA and mabey the market, pretty soon: mabey right around the election.

i do however, think we are at a breaking point where we could go both ways. i think market capitulation is upon us real soon, thats when you want to jump in and invest.

another interesting fact: Warren Buffet is investing billions right now, which says alot. if he is investing then the market is close to rock bottom. oh, and he invested in Wells Fargo which is the only american base company he owns (besides Berkashire Hawtahway of course, haha) which should tell you alot.
Oct 10 2008 2:26PM
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Ben.
Posts: 21463 - Karma: 683
trust me, dont. youll just be depressed hahahahaha
Oct 10 2008 2:28PM
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Campeador
Posts: 7516 - Karma: -1,227
At least you didn't have your money in real estate.

We got out just in time, just before the first bailout bill was rejected by the house.
Oct 10 2008 2:34PM
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SirFryanator
Posts: 11149 - Karma: 1,415
except warren buffet has super good interest rates and cuts from all the companies he invests in compared to pretty much everyone else, so he knows he's not taking too much of a loss no matter what.
Oct 10 2008 2:34PM
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ferrinski86
Posts: 774 - Karma: 10
yeah i know haha. the guy has so much money i guess it really doesnt matter. but at least he is still investing.
Oct 10 2008 2:37PM
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doritos
Posts: 7368 - Karma: 53
Alright, so I have $500 in a flexible CD at my bank and I want to take advantage of this situation here and start working on my retirement fund. I know it's not a lot of money, but I may be able to supplement it with some money from my checking and something is better than nothing. I know a fair amount about the situation but I know nothing about economics, I took one class on it freshman year to meet a requirement and skipped 90% of the time. So my questions are...

1. Should I invest it now or wait? If I'm waiting, what am I waiting for? When will I know it's a good time?
2. What should I invest it in? The best company in a particular sector? An IRA? Should I just call Vanguard and let them do it for me?
3. Is $500 enough? How much should I supplement it if not? I have a limited money supply but I'm gonna try for a job soon.

Thanks!



Oct 10 2008 2:46PM
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Ben.
Posts: 21463 - Karma: 683
Im pretty sure vanguards minimum for a Roth IRA (the way to go cuz they wont get taxed) is a thousand but im not sure. if its less, i would recommend putting in the minimum and then every few weeks add a bit more, that way if the market continues to tumble you dont lose quite as much, but if it goes up you get some good out of it.
Oct 10 2008 2:55PM
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Campeador
Posts: 7516 - Karma: -1,227
Invest in grocery stores, this is going to get worse before it gets better. Grocery stores and food suppliers have been doing well lately. In fact, our Kraft stock is probably the only one that hasn't been falling.

However, the amount $500 will get you in return right now is negligible. I'd say buy something that you'll enjoy (skis, outerwear, season pass, ect.). Or just hold on to it, you never know when unexpected expenses come up (like in my case a $100 bar tab haha)
Oct 10 2008 3:00PM
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Barefootin_Fiend
Posts: 7618 - Karma: 4,727
i hate when that happens
Oct 10 2008 3:03PM
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wrenegade
Posts: 6631 - Karma: 41
I pretty much agree with this. I think there will be wild fluctuations in the market for the next couple weeks.
Oct 10 2008 3:03PM
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ferrinski86
Posts: 774 - Karma: 10
1. there are 2 options here. 1) invest now for the long run and you will be fine. if the market looks like its going to crash (at $0) realize our loss and you can claim it as capital loses on your taxes. 2) dont invest and wait until the market settles out.

im waiting to see if capitulation kicks in.

2. mutual funds are a great idea to invest in for the long run. i would not invest in the best company in the best sector....well you could if you wanted to (ex. coca-cola, microsoft, they are all good companies that are for the most part stable)

IRA's are the way to go, especially a ROTH IRA, because they are not taxed at retirement, however they are not tax-deductible when you put money in either. go talk to somebody that deals with IRA's and they can tell you what to do.

3. $500 is enough for the stock market but not for long-term investment plans such as IRA's. mine was a minimum of 1,000.

IF you really want to start investing go see somebody in the market or somebody that deals with IRA's or all those other instruments that you can invest in. I WOULD STRONGLY suggest you find somebody that you trust and know in the financial world because you are trusting them with your money. i love my stock broker. haha
Oct 10 2008 3:30PM
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futurespin
Posts: 2178 - Karma: 168
*Remember you dont acually lose money until you SELL your stocks...

Right now is a good time to invest, whether or not stocks will be higher or lower in a month is irrelevant. When it comes to investing its the long term that matters, and stocks will be significantly higher in 5 years then they are today.

In times of recession invest in things that people CAN'T live without, such as food.

This is for the people a few posts up, not the person who started this thread.
Oct 10 2008 3:37PM
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TheButterHashira
Posts: 9691 - Karma: 1,702
It could go down some more but if she doesn't plan on touching that money for a while she should probably ride it out. It's going to get worse before it gets better but eventually stocks will rise higher than they ever and she will have made money. My business teacher said most people are just waiting it out.

Oct 10 2008 3:45PM
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Campeador
Posts: 7516 - Karma: -1,227
Or the company goes bankrupt.
Oct 10 2008 4:03PM
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VCharette
Posts: 4276 - Karma: 1,047
fuck i wish i had like a little 100k in bank and i could buy made stocks and be rich in like 4-5 years that'd be dope... and dude dont sell your things or else you really WILL have lost your money for now you didnt loose nothing so dont sell that'd be dumb...
Oct 10 2008 4:14PM
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