On the topic of the "three steep declines", there are a couple of points that we should keep in mind.
Despite the "steep declines" we have seen, the market closed on Friday only about 15 points lower than in the previous month. All of these "declines" have been recovered.
Despite the three declines, the market is still up 18% over last year.
Despite the problems in the sub-prime real estate lending market, the vast majority of Americans still manage to pay their bills on a monthly basis.
Even the failure of the entire sub-prime market (which will not occur) will only effect the finance companies and their owners, not the average American.
Even those with mortgages at those companies that fail won't be adversely affected, as long as they keep making their payments.
Almost every single investment strategist and money manager out there is recommending that people do NOTHING. Don't invest in finance companies, don't DIVEST of finance companies. We are seeing market volatility, not a market crash. Don't panick, stay in for the long haul, and if the daily jumps in the market are making you crazy then stop watching the market and ignore it. The economy is NOT collapsing. The markets are not failing. The real estate industry is not failing. Just ride out the waves, and you'll be fine.
The volatility in the market is being caused by undue panic in the marketplace caused by negative perceptions. These negative perceptions are being caused by the media screaming at the tops of their lungs about the dangers in the marketplace, and how they have all been caused by Bush. The panic is unnecessary and no such dangers exist. Ride out the panic like a professional investor, not an amateur speculator, and you'll do fine.
Elliot
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