|Re: Stock Market
||[Sep. 29th, 2008|02:12 pm]
and I'm freeeeeeeeeeeeee... free-fallin'... Yeah, I'm freeeeeeeeeee... free-fallin'...
Not quite - it's more like a rubber bounce ball thrown very hard on the floor. Been a fun day, let me tell you.
Oh, yeah. The saddest thing about the stock markets is that people are creating their own crises. If you're invested in a non-financial company, yeah, things might get rocky, but I seriously doubt that Washington Mutual's failure is going to bring down Microsoft or Apple.
A single financial failure is not going to bring down any of the non-financial companies, but the tightening of credit is certainly going to put some strain on some - with regards to meeting payroll or any sort of capital expenditures. Moreso the smaller companies than a Microsoft (particularly since they do have significant cash reserves).
things might get rocky - the problem with this is that people tend to panic and act rashly, even if their prospects are fine long-term. Or, simply put, everyone's tolerance for risk is high when the markets are up.
*buys like crazy*
Don't mind me, just setting up the complete killing I'm going to make over the next few decades...
As long as you've got the stomach for volatility, good discipline and a long enough time horizon, you probably will. Some of the activity in the marketplace lately (I'm looking at you, Mr. Buffett) has been akin to piracy.
Yeah, I've got at least 35 years until retirement, hopefully more, and I'm trying to spread the buying around a lot so even if some of the companies go under I'll still come out ahead on the rebound.
Mind you, I don't have the time or the energy or the balls to *really* make a killing, which would involve buying and selling multiple times a day. I'm just buying generally good stocks up when the market's really low and planning to hold onto it until things stabilize.
Strictly speaking, a buy-and-hold type of strategy, not a 'day-trader' strategy, is better. You are far more likely to lose money in the second over the long haul, especially if you try to time the market. Your approach of buying good, fundamental companies low and holding them for a while is by far the better long-haul approach, even if it isn't as glamorous. That's how the afore-mentioned Buffett made a lot of his investing fortune, in fact.
Hear, hear. Long-haul inveesting, with patience and discipline, is the key to long-term success. In general, timing the market will at best cause needless stress. At worst, it will prove detrimental to one's returns. I also eagerly look forward to amassing much wealth over the next 30 years.