Now panic?

[javasaurus]

Dow closes down more than 600 points, ending less than 8700. It was at about 14000 one year ago.

GM is at 1950s levels (down more than 30% today).

Cedar Faire (they own Cedar Point, King's Island, King's Dominion, Knottsberry Farm, etc.) is down more than 20% for the day.

Edit: Dow closed down nearly 700 points, ending less than 8600.

Comments

[dawntreader]

holy crap. that's utterly unbelievable. :(

i got my 401K statement yesterday. not only did i lose this year, but i've lost more value than i ever put in for the last two years. i don't know if i should diversify more and put it in less stocks or what, or if that would make it worse. they keep saying don't do that, leave it alone, blah blah blah. but yanno? that sounds scary right now.

[javasaurus.livejournal.com]

The current market is a scary situation. But I'm leaving my 401k right where it is (mostly in stocks). Why? Because sometime around January 2000, the market was at 11750. By late 2002, it dropped to around 7200, a drop of about 40%. But throughout late 2007, it was teasing the 14000 level, hitting a high of about 14200. Now it's down to 8600, a drop of 40% (sound familiar?).

I really suspect that it is near its bottom. Yes, the economy may continue to decline a bit, but investors are looking to the future -- the "worse" is already in their decisions, already reflected in the current stock market. The money that is lost is lost. Too late to change that. Your 401k won't recover if you move it from stocks into bonds.

If we knew how far the market would collapse, then moving from stocks into bonds before that collapse would be good, and then move it back afterwards to take advantage of the recovery. But we've already missed that chance, so better to just stick it out as is, in my opinion.

Remember, if you've got 10 or more years until retirement (and you do!), then stocks will do better for you on the average. As retirement approaches, then you will want to move the money to more secure bonds and funds so that a sudden swing like this doesn't catch you right before retirement.

[dawntreader]

i know what you're saying is true. it's just difficult to look at my statements and believe it in my gut. maybe i'll stop opening my statements. ;)

i wonder if anyone knew the stocks would fall like they did and could have moved their stocks around first?

[wilhelmina-d.livejournal.com]

I don't know... I think when Fannie & Freddie started going all wibbly that would have been a good time, but otherwise... I don't know if anyone realized the far-reaching consequences. Still, as javasaurus said, if you have more than 10 years to retirement you're likely to be fine.

[javasaurus.livejournal.com]

With some 401k plans, when you put in a request to move money around, it can take days or weeks. I think this is intentional so that people keep their eye on the big picture instead of "playing the market" with their retirement. My plan used to allow four such moves per year, and it would occur thirty days after the request. That changed a couple of years ago, I'm not sure what the current rules are. But your plan may have a similar structure.

[cozit.livejournal.com]

For once in his life (well, since he started to play with stocks a little bit), DH was smart and shifted a good portion of his 401K into bonds just before the drop. He rarely plays super safe with investments, so he got really lucky with the timing. Even so, his current retirement value is literally down almost half of what it was early September.

Wanna guess how many times I've mentioned that it's a good thing that he's not planning to retire for another 20 years... at least?

Wanna know how even happier I am that I put my salary from the last few years - aka the kids' school fund (mostly) - first into a CD type account, and it's still sitting in the savings account (slightly kicking myself for not sticking it into a longer term CD when the first ended... but so happy we didn't invest it the way we had originally planned to get around to this summer...)....

Wanna know how amazed my kids are at the fact that when I opened my first savings account, all accounts were 5% return... and that it was better than that for a long time, too... when the girlie saw her first statement earlier this week?

S'okay... at least in savings, they're not going down... they just didn't go up so much first.

[wilhelmina-d.livejournal.com]

I have been panicing for a couple months now. I can't imagine the @%*(&$ bailout will actually stop this hemorraghing. But, this could end up being just a "market correction", too.

ETA: I did go and do some math and we're still not in the largest percentage stock market drop. The largest was, of course, the Great Depression at about an 88% drop (and later in the Depression there was a 47% drop after a signficant climb). In the 70s there was a 37% drop, the 80s had two big drops of 19% and 24%. I think the dot-bomb was only about 15%. Right now we're (since July) at about a 34% drop.

[javasaurus.livejournal.com]

The dot-com bust and 9/11 both fed into the slow decline between early 2000 and late 2002 of about 40% overall, similar to what we've seen in the last twelve months.

Some people are panicking. I'm just wishing I had about $10k sitting around collecting dust so I could take advantage of this buying opportunity.

[bellev.livejournal.com]

Yeah, I was thinking the same thing. After doing some research, I discovered this is how some people get rich. When the market bottoms they buy up a ton with their liquid funds so not only does it start to increase the market value and confidence in investors, but those persons suddenly own large shares of stocks that are climbing.

If only the lottery would pan out for me...

[dawntreader]

but what would you buy up?

[javasaurus.livejournal.com]

Disney (DIS), SunTrust(STI), Apple(AAPL), Visa (V)
I'd probably put some into stocks that seem riskier right now: Six Flags (SIX), Sirius/XM (SIRI).

[bellev.livejournal.com]

Suntrust, really? I can see Disney and Apple (and already have some investment in both). Visa is a great choice. Not sure about the Six Flags and Sirius investments. Suntrust? I was thinking BoA.

[blueeowyn.livejournal.com]

We already have an interest in Suntrust doing well. My grandfather was one of the founding investors when it started. I used to be a BoA customer but their lack of clue and lack of customer service convinced me to jump to my current bank several years ago (I had originally been at a bank that was bought then BoA bought that bank. I briefly had checks for a bank that was two before the current owner (I had to buy new checks because they wouldn't honor the old ones).

Hmmm, I wonder what happened to my savings account from when I was a child. I never got to do much with it but I remember having a book and going to the mall with my Mom to get $. I think I got up to around $20 in it at one point (HUGE amount of money for me on my $.25/week allowance) but some of that was birthday/holiday $. I don't remember dealing with it at all once I was around 10. I guess maybe we closed it and moved it to something else.

[javasaurus.livejournal.com]

Suntrust is still an up-and-coming bank, still spreading.

They have great dividends.

Unless I'm greatly mistaken, they aren't as affected as other banks by the mortgage fiasco -- they were more careful in making loans, etc. Their price is being dragged down by the banking sector, not their internal problems.

BoA may also be good, and I'm sure there are other fine companies I didn't list. Because of my job, there are certain sectors I should not invest in, so I didn't mention anything from those.

[wilhelmina-d.livejournal.com]

I know what you mean! It's why Himself and I are looking to buy that property and why I am so terrified at the same time.