Goal #1 accomplished. 
Now, for the really fun part… let’s see how fast and how far the $5K falls! Muahahahah <evil laughter>
Some questions for everyone out there:
(a) do you feel lucky that the stock market drop has made stocks so much cheaper, thereby making increasing the chances you’ll get a sizeable gain when you sell in a couple of decades? Or,
(b) are you scared off by volatility and have stopped investing in stocks (but have kept your stock holdings relatively constant)? Or,
(c) are you pulling out of the stock market faster than a bankrobber’s getaway car after the big heist? Or,
(d) are you like me, crossing your fingers and keeping the faith (scared but still investing)?
Related posts:
I think I am a mix of a) and d)… I’m only 22 and just starting to invest this year, so with inexperience comes hesitation. But every person I’ve spoken to about investing and all of the advice I’ve read has urged that a down market is an opportunity. So while it’s hard to step away and not feel nervous, at my core I realize that right now I can buy low and (hopefully) sell high.
I’m a combination of a) and d). I know (from past history) that the market will rebound but other the other hand, 18 years (my retirement countdown) isn’t a long time in the big scheme of things. And that money has to last for 50 or more years…
Definitely (d). Luckily I have the blogoverse to bring me back to normal when I start freaking out.
I’m also a combo of a) and d). I’m 28 now and have been regularly investing in a mutual fund since I was 19. Now at the time, I didn’t really know what I was doing, but apparently I chose right (I was definitely lucky) because I was able to buy a lot of shares during the 2001-03 bear market and finally redeemed some of those shares last year before the market really took a turn for the worse, thereby making a tidy profit. I’m also regularly investing in my 403(b) as I won’t be accessing that money for years and years.
b
I would feel a) but i’m not allowed to contribute to my retirement this year (don’t have US income and I’m not eligible for any NZ plans). I’d be dumping as much as I could in if that weren’t the case!
My mom has to delay her retirement by at least 8 years now…what may be good for me is horrible for her.
A) no – I’ve lost enough money to ward off any good cheer that stocks are on sale
B) no – I don’t enjoy the rollercoaster ride but I’m sticking with it
c) no – I did sell one fund to capture the losses but bought something else a few days later
d) yes – all fingers and toes are crossed cause otherwise I’m toast
Hey smart alec,
Stay away from stocks, funds, bonds, unlesss you know what you are doing. In the sense spending at least 20 hours/week on investing and constantly monitoring the markets.
Otherwise, this is not your ordinary market, and believe me it will suck your money out of your little purse, faster than you would think.
Sell every freaking fund and put them into money market account, preferably a t-bill only.
Having said that if you still would like to go long and invest, here is my advice for you:
- Never ever buy a single stock, especially nowadays. It is simply too risky.
- Always be a trend investor on indexes. Think about what will happen in the next two to six months. For instance, bank stocks may go up a little due to more “free” money thrown at them.
- Understand put/call options and how they work. How you can utilize them to set your selling and buying points.
- Understand the bond market. It is ten times larger than the stock market and usually a good indicator of the overall economy.
- Watch CNBC, Bloomberg, even Cramer. But never ever buy or sell based on their advice. They are always providing you what is already priced into the market and usually do not give you the full picture.
Good luck.
I’m in the “a” camp. I buy mostly index funds and I when I see how discounted they are compared to when I started buying a year ago it makes me find more money in my budget to invest. I think my optimism drives the more pessimistic people crazy..
Oh, if *all* (and I do literally mean all) of my savings weren’t being eaten up every quarter by grad school, I imagine I would be having a field day with the stock market. Ok, maybe not having a field day but I would certainly put myself in category (a).