Weird market.

secretweaponevan · 08-20-2007, 11:23 AM

What the heck is up with the markets lately?
<rant>
The US dollar is apparently weak against foreign currencies (almost even with the Canadian Dollar), yet the price of gold is low. Also the DOW took a hit and many mainly US owned stocks are sinking. If the US Dollar is devaluating, shouldn't indices and stocks be moving up in value vs. the Dollar since it is worth less?

</rant>

Walking_Target · 08-20-2007, 12:22 PM

it all depends on the US economic situation.

in this case, the US is again heading towards recession, the national debt is at an all time high, (something in the area of 14% of the national GDP) or the equivalent to $28 000 US dollars for every man, woman and child in the united states; combine that with a weak market position, and devaluing of the currency, and the US is in some serious trouble.

It also has to be understood that the constant importations of goods from china and other producing countries, for which many businesses cannot really afford, is having a huge impact; and none of this is to mention the billions of dollars that has been wasted on an unjust war in Iraq and Afghanastan

PJ · 08-20-2007, 06:41 PM

Politics aside (ahem), my 401(k) savings plan at work has been taking a beating the past two months.

Latoolman · 08-20-2007, 07:16 PM

Quote:

Originally Posted by PJ

Politics aside (ahem), my 401(k) savings plan at work has been taking a beating the past two months.

My last quarter was really good.... I'm not looking forward to this coming one though.... BUT ... 20 more years and it'll be there !!!!

PJ · 08-20-2007, 07:20 PM

Mine had finally got to where it had a decent amount in it and was doing well. Unfortunately about 35% of mine is in my company's stock, which has taken a beating here lately since we went public.

Latoolman · 08-20-2007, 07:35 PM

Yeah company stock is a tough way to go but if that's the only options given, you got to go with it...

My 401 is mostly (99%) in the Fidelity ContraFund... they gave us about 4 other choices all of which are garbage Fidelity Contrafund Report (FCNTX) | Snapshot

Post 9/11 it's been a great performer...

mike31c · 08-20-2007, 07:46 PM

welcome to the World Market.

A couple of things first:
The US Dollar has been weak against the Euro for several years...
The US Dollar has NEVER been devalued by the US Government (outside the conspiracy theories)... The value of the US Dollar adjusts to market reactions to the rest of the world currencies... Some call less purchasing power as devalued but it's not really, when compared to the rest of the World Market...

What is happening is the US Housing Market is collapsing under the weight of sub-par loans, which is causing many of the large lenders to sell off their stock holdings to prop up the bad loans. When they sell off that stock, it causes the market to react...

Many of these loans (on houses and the stock) were made from borrowed cash... When the investors get nervous, they want their $$$ back
http://www.mercurynews.com/search/ci_6663280

Here's an article published in my local Sunday's newspaper with a picture of what is happening...
--> http://www.bayareanewsgroup.com/mult...907_circle.pdf

(sorry, this newspaper may ask you to register!)

Let me tell you something: I have been invested in the US Stock market for over 20 years (since I was 15yrs old) and this is not the first time a small bump has happened in the DJIA. I have seen similar bumps in 1987, 1989, and in bits and pieces in the 90's and the market has always corrected itself.

The Stock Market (401k's too!) is for the long haul and you really should NOT worry about dips in the market. Does it suck seeing your 401k drop in the value of the $$$ you put into it? Of course it does... But in all reality, if you get nervous over every single drop in value, then you should not be investing in stocks, mutual funds and the like... There are other short term options such as Treasury Securities such as Treasury Bills that some of which have a 4 week redemption time.

At the same time, it would suck like Smart Parts if all you had was your company stock in your 401k's and other retirement/investment plans and it all wound up like Enron...

Gold is a so-called Inflation safety blanket, not necessarily an indicator of what the world currencies will hold to because I can't remember a real Country still using the so-called "Gold Standard" of propping up their currencies.

I can't imagine what is going to happen if the stock market goes down, housing sales goes down AND inflation causes gold prices to go up, as I have only seen that happen in third-world countries...

PJ · 08-20-2007, 08:22 PM

I agree Mike, but it is unsettling to see your 401(k) drop in value over 8% in two months even when you include how much goes in from biweekly paychecks! I had hoped my company's stock would rebound some like it did earlier in the year so I could swap out half or so of it into the other available funds (Vanguard). But yes, that's life. Hopefully things will settle soon.

mike31c · 08-20-2007, 08:55 PM

Okay, but you can (or should be able to) change the percentages of your $$$ going into exactly what fund/stocks at any time (if you wished)...

Unless the matching is entirely in company stock, I would stop putting new $$$ and the matching in the company stock and into other funds if you are uncomfortable in the current situation...

Although 8 percent may seem like a lot, in the long term, that drop will be meaningless since the next paycheck, you are getting more shares percentage wise in relation to price when it goes back up.

And, unless YOU are concerned about your company financial situation, don't worry about it

( unless you are like an employee of Capital One who just announced it's ending its wholesale mortgage division...)

Look at it another way -->

A long time ago, Apple Computer had it's share prices at around $20.00

A Ten Percent Drop will make the share @ $18.00...

PJ · 08-20-2007, 09:15 PM

Quote:

Originally Posted by mike31c

Okay, but you can (or should be able to) change the percentages of your $$$ going into exactly what fund/stocks at any time (if you wished)...

Yep, I can move the amounts within the funds (and reallocate where my paycheck deduction is going), but I'd like to be able to recoup some of what was "lost" in the company stock fund. More bang for the buck, so to speak.

08-20-2007, 11:23 AM	#1 (permalink)
secretweaponevan Marathoner Join Date: Aug 2007 Location: Pocono Lake, PA	Weird market. What the heck is up with the markets lately? <rant> The US dollar is apparently weak against foreign currencies (almost even with the Canadian Dollar), yet the price of gold is low. Also the DOW took a hit and many mainly US owned stocks are sinking. If the US Dollar is devaluating, shouldn't indices and stocks be moving up in value vs. the Dollar since it is worth less? </rant>

08-20-2007, 12:22 PM	#2 (permalink)
Walking_Target Post Whore Join Date: Mar 2006 Location: ON, Canada	it all depends on the US economic situation. in this case, the US is again heading towards recession, the national debt is at an all time high, (something in the area of 14% of the national GDP) or the equivalent to $28 000 US dollars for every man, woman and child in the united states; combine that with a weak market position, and devaluing of the currency, and the US is in some serious trouble. It also has to be understood that the constant importations of goods from china and other producing countries, for which many businesses cannot really afford, is having a huge impact; and none of this is to mention the billions of dollars that has been wasted on an unjust war in Iraq and Afghanastan __________________

08-20-2007, 06:41 PM	#3 (permalink)
PJ Retired from paintball Join Date: Apr 2006 Location: Powell, TN	Politics aside (ahem), my 401(k) savings plan at work has been taking a beating the past two months. __________________ Paul AIM: PJDarknight CPPA #1145 / PPIG #496 / LPPC #103 / POG #1047 / Team Rogue Cell #7 PJ's Gallery on MCB Feedback on MCB

08-20-2007, 07:20 PM	#5 (permalink)
PJ Retired from paintball Join Date: Apr 2006 Location: Powell, TN	Mine had finally got to where it had a decent amount in it and was doing well. Unfortunately about 35% of mine is in my company's stock, which has taken a beating here lately since we went public. __________________ Paul AIM: PJDarknight CPPA #1145 / PPIG #496 / LPPC #103 / POG #1047 / Team Rogue Cell #7 PJ's Gallery on MCB Feedback on MCB

08-20-2007, 08:22 PM	#8 (permalink)
PJ Retired from paintball Join Date: Apr 2006 Location: Powell, TN	I agree Mike, but it is unsettling to see your 401(k) drop in value over 8% in two months even when you include how much goes in from biweekly paychecks! I had hoped my company's stock would rebound some like it did earlier in the year so I could swap out half or so of it into the other available funds (Vanguard). But yes, that's life. Hopefully things will settle soon. __________________ Paul AIM: PJDarknight CPPA #1145 / PPIG #496 / LPPC #103 / POG #1047 / Team Rogue Cell #7 PJ's Gallery on MCB Feedback on MCB

08-20-2007, 07:46 PM	#7 (permalink)
mike31c Seasoned Member Join Date: Mar 2006 Location: San Francisco Bay Area, California	welcome to the World Market. A couple of things first: The US Dollar has been weak against the Euro for several years... The US Dollar has NEVER been devalued by the US Government (outside the conspiracy theories)... The value of the US Dollar adjusts to market reactions to the rest of the world currencies... Some call less purchasing power as devalued but it's not really, when compared to the rest of the World Market... What is happening is the US Housing Market is collapsing under the weight of sub-par loans, which is causing many of the large lenders to sell off their stock holdings to prop up the bad loans. When they sell off that stock, it causes the market to react... Many of these loans (on houses and the stock) were made from borrowed cash... When the investors get nervous, they want their $$$ back http://www.mercurynews.com/search/ci_6663280 Here's an article published in my local Sunday's newspaper with a picture of what is happening... --> http://www.bayareanewsgroup.com/mult...907_circle.pdf (sorry, this newspaper may ask you to register!) Let me tell you something: I have been invested in the US Stock market for over 20 years (since I was 15yrs old) and this is not the first time a small bump has happened in the DJIA. I have seen similar bumps in 1987, 1989, and in bits and pieces in the 90's and the market has always corrected itself. The Stock Market (401k's too!) is for the long haul and you really should NOT worry about dips in the market. Does it suck seeing your 401k drop in the value of the $$$ you put into it? Of course it does... But in all reality, if you get nervous over every single drop in value, then you should not be investing in stocks, mutual funds and the like... There are other short term options such as Treasury Securities such as Treasury Bills that some of which have a 4 week redemption time. At the same time, it would suck like Smart Parts if all you had was your company stock in your 401k's and other retirement/investment plans and it all wound up like Enron... Gold is a so-called Inflation safety blanket, not necessarily an indicator of what the world currencies will hold to because I can't remember a real Country still using the so-called "Gold Standard" of propping up their currencies. I can't imagine what is going to happen if the stock market goes down, housing sales goes down AND inflation causes gold prices to go up, as I have only seen that happen in third-world countries...

08-20-2007, 08:55 PM	#9 (permalink)
mike31c Seasoned Member Join Date: Mar 2006 Location: San Francisco Bay Area, California	Okay, but you can (or should be able to) change the percentages of your $$$ going into exactly what fund/stocks at any time (if you wished)... Unless the matching is entirely in company stock, I would stop putting new $$$ and the matching in the company stock and into other funds if you are uncomfortable in the current situation... Although 8 percent may seem like a lot, in the long term, that drop will be meaningless since the next paycheck, you are getting more shares percentage wise in relation to price when it goes back up. And, unless YOU are concerned about your company financial situation, don't worry about it ( unless you are like an employee of Capital One who just announced it's ending its wholesale mortgage division...) Look at it another way --> A long time ago, Apple Computer had it's share prices at around $20.00 A Ten Percent Drop will make the share @ $18.00...