Market Meltdown

[mirth]

We have very different retirement plans.

[endfire79]

That's the market.

Recently my uncle changed my viewpoint on financial investments. One of my aunt's/uncles is a friend of an artist down in the Niagara region (Trisha Romance), and bought a bunch of her stuff over the last few decades and filled their houses with the stuff.  I visited the artist's gallery this weekend in Niagara on the Lake and checked out some prices on some of the prints.  I'm pretty sure my uncle made more on those paintings than he ever did in the stock market.

[mirth]

This stuff ain't new. Blindly tying up your retirement money in a mutual fund is like taking it to Vegas. And Biggs is right, the house always wins.

The markets don't go through trillions of dollars in losses over a couple days without someone wining.

[LongBlade]

The markets don't go through trillions of dollars in losses over a couple days without someone wining.

I disagree.

There are certainly people who short sold, but if you understood derivatives you'd realize that they're a fool's errand.

The only way to win a down market is to get out before it goes down.

Timing a market correctly is a dangerous game, but one that can be navigated by someone who is willing to short sell the market high and get in too early when the market bottoms out. That's a tough deal to make and one that is fraught  with danger.

There are other, more successful strategies for investing. But most important is to understand your willingness to undertake risk. If your tolerance for risk is zero then you need to stuff cash under your mattress. If you like a ton of risk then you'll take your bets to Vegas on how few seconds Star's erections last. Somewhere in between is a venture into the stock market. A reasonable strategy which understands risks and rewards will, of the the long run, serve the average investor just fine.

[jomni]

One can focus on dividends too. Pick those that pay a lot of divs and has good earnings potential even in worsening economies.   The stock price will only matter of you want to cash out.  But if your in for the long term, the dividends should be rewarding enough to make you ignore the price volatility.

[Centurion40]

The markets don't go through trillions of dollars in losses over a couple days without someone wining.

I disagree.

The winners are those who make commission on the purchase or sale of every stock. So long as the market goes up or down, they are happy.

[LongBlade]

The markets don't go through trillions of dollars in losses over a couple days without someone wining.

I disagree.

The winners are those who make commission on the purchase or sale of every stock. So long as the market goes up or down, they are happy.

I'll bet if you ask around your local brokerage firms you'll discover very few of those folks are happy right now.

[Centurion40]

I have a friend who trades commodities.  He says that he doesn't care if the market goes up or down, so long as it moves.  He hates it when there is little to no movement on any given day, because he makes no money.

The traders who are upset are those who have investments of their own, or who work for an investment house that took a shit-kicking.

But people who make commission on movement are wearing shit-eating grins and buying new cars.

[LongBlade]

Fair enough.

[airboy]

Wealth for whom? The small investor will get crumbs if they are lucky.

Opportunity is equal to small and large alike. Certainly 10% appreciation is more on a million dollars than a hundred, but the percentage gain is identical.

No it isn't, it is well known that some big private fund companies or other high speed trading entities have the ability to make their trades before others, like pension funds, know what is going on. It is CCDA applied to money.

If you buy and hold for the long term with a diversified portfolio - you minimize trading costs and the day to day fluxuations are meaningless.  The trades on a minute-to-minute basis are only relevant if you are trading daily. 

Compared to even 10 years ago, you can buy mutual funds which are broadly diversified at a minimal cost.  The market is more "fair" to a small investor in terms of transaction costs and holding costs than ever before.

[airboy]

I probably lost at least $150,000 in the downturn.  But I have not looked and usually don't review my portfolio more than quarterly.  My wife and I put back large amounts in retirement accounts when we started working 28 years ago.  Over this long time period of saving and gaining the benefits from the investment have been huge.  This does not count social security, real estate, or my actual work pension.

But you have to spend less than you make, invest what you save, be patient, and keep your costs low. 

[jomni]

This guys seems happy.
http://www.bloomberg.com/news/articles/2015-08-28/while-many-panicked-japanese-day-trader-made-34-million

[jomni]

Too many bears.  Time to go contrarian.

[Bison]

Damn 470 point drop today. 

[Staggerwing]

Now I'm starting to worry about the pension I have from my old employer. I've heard an unconfirmed rumor that new employees are no longer offered that same plan and have only 401Ks to opt into. It'll be three more years before I can pull my cash out and reinvest in some other vehicle. I know the pension's value will eventually climb again but I'm worried that the plan will get defunded at some point before then.