« Bear Markets Fall Faster than Bull Markets Rise | Main | The Buy and Hold Myth »

It's Not Going to Be That Easy

On Monday many of my friends began asking me if the 11% rise in the Dow Jones meant the market had bottomed. Some even suggested now was the time to get back in to the market. I suggested to them that the market was oversold and we were due for a rally. Most importantly I mentioned that the biggest days happen in bear markets. According to this article, nine of the largest point increases for the S&P 500 for example, occurred in the 2000-2002 bear market. As if on cue the market sold off mildly yesterday and tanked today.

 

The chart shows the market down 9% for the day. The market is not going to go straight up. The financial mess we are in is going to time time to fix. In the meantime the market is focused on the fact that we are in a recession, which means company earnings will slow. Since earnings will slow stock prices have to be taken down to compensate.

Posted on Wednesday, October 15, 2008 at 04:17PM by Registered CommenterMichael in | Comments1 Comment

Reader Comments (1)

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to

say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


Betty

http://www.my-foreclosures.info
November 16, 2008 | Unregistered CommenterBetty

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.