[Dow] dropped 250 points today?

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thelateinvestor43
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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Mon Dec 02, 2019 8:52 pm

Guys don't worry, I will stay the course and invest in my index funds! This had nothing to do, I've only been doing this or even following this type of stuff for about 4 weeks, so it's all NEW to me.

I understand it goes up and down and I now understand that I still will own the same amount of shares whether the market goes up OR down. I realize it will come back up again. I read some guy saying that his "4 years of gains were wiped out in 2 week" in another thread from the past. He was panicking, but he still owned the same amount of shares and I'm sure the market came back since then.

I realize a lot of people panic and "get out" (sell shares) when they think the market is going to tank, but I KNOW that's not the thing to do as many people here have told me over the last few weeks and I agree.

:)

dru808
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Re: [Dow] dropped 250 points today?

Post by dru808 » Mon Dec 02, 2019 8:52 pm

thelateinvestor43 wrote:
Mon Dec 02, 2019 4:46 pm
What's going on with the Dow dropping 250 points today?

I'm new to all this.

[Edited post title to read "Dow" rather than "S&P" -- moderator oldcomputerguy]
It’s nonsense. The more you pay attention to it, the more likely you are to trade your total stock market for Domino’s pizza stock. 🌎 > 🍕

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thelateinvestor43
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Re: S&P dropped 250 points today?

Post by thelateinvestor43 » Mon Dec 02, 2019 8:54 pm

rascott wrote:
Mon Dec 02, 2019 8:51 pm
thelateinvestor43 wrote:
Mon Dec 02, 2019 8:47 pm
rascott wrote:
Mon Dec 02, 2019 5:34 pm
thelateinvestor43 wrote:
Mon Dec 02, 2019 4:46 pm
What's going on with the Dow dropping 250 points today?

I'm new to all this.


I'm going to concur with another poster...I honestly don't think you are ready to invest in anything, much less equities.

Today was a nothing day. Stocks don't move in linear fashion.... over a day, week, month, year, or even decade.
I am ready to invest. I'm not scared with my measly $6k going up or down. I just didn't understand the news today.


Honestly best thing you could do then is invest it and forget it... maybe look once a year at it.

Proper investing is 'watching paint dry' level boring.
It's new to me so I'm excited, but I'm sure after a few months it will get old and I won't check my account to see if my measly $6k has went up $10 or down. Right now though it's fun and if I see $10 gain I feel ok!

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Re: [Dow] dropped 250 points today?

Post by Grt2bOutdoors » Mon Dec 02, 2019 8:55 pm

Nothing happened, it’s normal for sales markdowns to occur- on a daily basis. Those who are in accumulation mode should welcome such markdowns.
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Re: S&P dropped 250 points today?

Post by sergeant » Mon Dec 02, 2019 9:05 pm

thelateinvestor43 wrote:
Mon Dec 02, 2019 5:12 pm
Sorry, I screwed up and meant the DOW. I still don't get all this, but YES I KNOW the stock market goes up and down, but the news said "in one of the worse losses since October" or something.
If you know the market goes up and down why did you ask the question? If the market goes up 1% tomorrow are you going to start another thread?
You have been asked several times by wise people to read the wiki. Do you plan on reading it? :annoyed
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Re: S&P dropped 250 points today?

Post by MechEngOSU » Mon Dec 02, 2019 9:12 pm

thelateinvestor43 wrote:
Mon Dec 02, 2019 8:54 pm
It's new to me so I'm excited, but I'm sure after a few months it will get old and I won't check my account to see if my measly $6k has went up $10 or down. Right now though it's fun and if I see $10 gain I feel ok!
OP, to get a feel for the typical values of swings in the stock market, I recommend reading Random Walk by Malkiel or William Bernstein’s books. They are very helpful to get a sense for “Normal” and better appreciate expected variation.

One behavioral finance caution from your statement....I’m the same as you and get excited when the price goes up, but the trick in the accumulation phase is to teach yourself to also get excited when it goes down (buying shares at lower prices). This takes a lot more discipline and persistence. Good luck.

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Re: S&P dropped 250 points today?

Post by tibbitts » Mon Dec 02, 2019 9:32 pm

MechEngOSU wrote:
Mon Dec 02, 2019 9:12 pm
thelateinvestor43 wrote:
Mon Dec 02, 2019 8:54 pm
It's new to me so I'm excited, but I'm sure after a few months it will get old and I won't check my account to see if my measly $6k has went up $10 or down. Right now though it's fun and if I see $10 gain I feel ok!
OP, to get a feel for the typical values of swings in the stock market, I recommend reading Random Walk by Malkiel or William Bernstein’s books. They are very helpful to get a sense for “Normal” and better appreciate expected variation.

One behavioral finance caution from your statement....I’m the same as you and get excited when the price goes up, but the trick in the accumulation phase is to teach yourself to also get excited when it goes down (buying shares at lower prices). This takes a lot more discipline and persistence. Good luck.
The trick is to get excited when the market goes down and you lose you job or your business at the same time. Sometimes there are reasons for markets going down, and sometimes the reasons include real weakness in the underlying economy.

MotoTrojan
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Re: [Dow] dropped 250 points today?

Post by MotoTrojan » Mon Dec 02, 2019 9:34 pm

You should be prepared for the Dow to drop over 14,000 points (~50% decline) over a few months, if not weeks. This is a normal day in the market.

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Re: [Dow] dropped 250 points today?

Post by yangtui » Mon Dec 02, 2019 9:40 pm

you should avoid consuming news.

TheDDC
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Re: S&P dropped 250 points today?

Post by TheDDC » Mon Dec 02, 2019 9:59 pm

MechEngOSU wrote:
Mon Dec 02, 2019 9:12 pm
thelateinvestor43 wrote:
Mon Dec 02, 2019 8:54 pm
It's new to me so I'm excited, but I'm sure after a few months it will get old and I won't check my account to see if my measly $6k has went up $10 or down. Right now though it's fun and if I see $10 gain I feel ok!
OP, to get a feel for the typical values of swings in the stock market, I recommend reading Random Walk by Malkiel or William Bernstein’s books. They are very helpful to get a sense for “Normal” and better appreciate expected variation.

One behavioral finance caution from your statement....I’m the same as you and get excited when the price goes up, but the trick in the accumulation phase is to teach yourself to also get excited when it goes down (buying shares at lower prices). This takes a lot more discipline and persistence. Good luck.
This is the best advice I've seen yet. The other thing the OP needs to get in the mindset of doing is continual investing, whether done automatically of by you. However, for the OP I would recommend auto investing. If you aren't putting any new money in then I could totally understand why one would get a little upset with a market decline. If one is continually investing during the ups and downs it's a different behavior at play there. I recommend the "fill in the gaps" method where every time your shares decline in price less than what you paid, fill in the gaps to bring them back up to basis and then some

-TheDDC
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Re: S&P dropped 250 points today?

Post by Portfolio7 » Mon Dec 02, 2019 10:36 pm

thelateinvestor43 wrote:
Mon Dec 02, 2019 8:47 pm
rascott wrote:
Mon Dec 02, 2019 5:34 pm
thelateinvestor43 wrote:
Mon Dec 02, 2019 4:46 pm
What's going on with the Dow dropping 250 points today?

I'm new to all this.


I'm going to concur with another poster...I honestly don't think you are ready to invest in anything, much less equities.

Today was a nothing day. Stocks don't move in linear fashion.... over a day, week, month, year, or even decade.
I am ready to invest. I'm not scared with my measly $6k going up or down. I just didn't understand the news today.
So yes, the tariff tweets from our President is the nominal cause of the decline today... and the reality is that this probably did contribute, but there are many other variables, and perhaps several of them had an impact. Trying to id all those variables, & understand their impacts is a fool's game. Professional economists generally fail at predicting even the most important known variables that receive the most attention. Then there is investor sentiment, aka 'animal spirits'. Nobody can identify how or why that will change with any certainty or regularity.

Investing is like walking a tightrope without a safety net. The only thing that really matters is keeping your balance. In context of investing, where you are trying to simply take what the markets give you - what matters is avoiding costly mistakes. The investor wiki will take you through the basice, and note the pitfalls that investors are subject to. Then figure out how they apply to you, because I guarantee you, knowing the pitfalls is not the same as avoiding them. It helps, but you also have to understand the conditions under which you are vulnerable to error, and how to offset that risk with your investment process. For example. some few people fight anxiety by staying informed about the markets. Most seem to do better by not looking at all. You see both those approaches reflected in comments above. It's not important which approach you choose. What matters is that you find a way to deal with anxiety so you don't sell when the world feels like it's falling apart.
"An investment in knowledge pays the best interest" - Benjamin Franklin

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Re: [Dow] dropped 250 points today?

Post by LilyFleur » Mon Dec 02, 2019 10:52 pm

OP, to get a feel for the typical values of swings in the stock market, I recommend reading Random Walk by Malkiel or William Bernstein’s books. They are very helpful to get a sense for “Normal” and better appreciate expected variation.
I highly recommend this book:
https://www.amazon.com/Random-Walk-Down ... b_title_bk

Read it instead of the news. Please do not watch TV news--it is shallow and sensationalistic. If you want financial news, read the Wall Street Journal, but even though they do a great job with financial news, they cannot predict the future.

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Re: S&P dropped 250 points today?

Post by thelateinvestor43 » Tue Dec 03, 2019 2:37 am

sergeant wrote:
Mon Dec 02, 2019 9:05 pm
thelateinvestor43 wrote:
Mon Dec 02, 2019 5:12 pm
Sorry, I screwed up and meant the DOW. I still don't get all this, but YES I KNOW the stock market goes up and down, but the news said "in one of the worse losses since October" or something.
If you know the market goes up and down why did you ask the question? If the market goes up 1% tomorrow are you going to start another thread?
You have been asked several times by wise people to read the wiki. Do you plan on reading it? :annoyed
I have read a lot of the wiki.

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Re: [Dow] dropped 250 points today?

Post by jsprag » Tue Dec 03, 2019 2:48 am

Stocks go up and stocks go down.

To get some perspective, there's 290 pages spanning more than eight years on two threads devoted to U.S. stocks either soaring or collapsing. Sometimes, like yesterday, there's a mildly amusing juxtaposition when these topics are adjacent in the feed.


Image

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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Tue Dec 03, 2019 6:28 am

So I guess the fall had something to do with Trump saying he's going to reinstate tariffs on steel with Brazil and Argentina.

I was going to purchase another index, but I'm now wondering if I should yet or I should wait to see if the market falls further down.

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Re: [Dow] dropped 250 points today?

Post by Daryl » Tue Dec 03, 2019 6:45 am

thelateinvestor43 wrote:
Tue Dec 03, 2019 6:28 am
So I guess the fall had something to do with Trump saying he's going to reinstate tariffs on steel with Brazil and Argentina.

I was going to purchase another index, but I'm now wondering if I should yet or I should wait to see if the market falls further down.
Be like Bob, the world's worst market timer: Bob (A Wealth of Common Sense)

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Re: [Dow] dropped 250 points today?

Post by RickBoglehead » Tue Dec 03, 2019 6:50 am

thelateinvestor43 wrote:
Tue Dec 03, 2019 6:28 am
So I guess the fall had something to do with Trump saying he's going to reinstate tariffs on steel with Brazil and Argentina.

I was going to purchase another index, but I'm now wondering if I should yet or I should wait to see if the market falls further down.
You are market timing. Guess what? The market is likely going to fall today due to a new statement made overnight. Or not.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Tue Dec 03, 2019 7:17 am

Thanks guys, you're right! Now, if it continued to go down for the next 2 weeks straight and THEN I bought I'd get a better return, but it could also go UP in that time too right?! Guess I need that crystal ball! :sharebeer

Actually thinking of it. This disproves clairvoyants and the like. If they REALLY could see into the future would they be reading palms for $20 a pop or investing in the stock market when it was going to crash??! :D

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Re: [Dow] dropped 250 points today?

Post by RickBoglehead » Tue Dec 03, 2019 7:31 am

thelateinvestor43 wrote:
Tue Dec 03, 2019 7:17 am
Thanks guys, you're right! Now, if it continued to go down for the next 2 weeks straight and THEN I bought I'd get a better return, but it could also go UP in that time too right?! Guess I need that crystal ball! :sharebeer

Actually thinking of it. This disproves clairvoyants and the like. If they REALLY could see into the future would they be reading palms for $20 a pop or investing in the stock market when it was going to crash??! :D
Now you got it.

Same goes for investment advisors. If returns were guaranteed, they'd invest all their money, be wealthy beyond belief, and not need to work as an investment advisor.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

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Re: [Dow] dropped 250 points today?

Post by CyclingDuo » Tue Dec 03, 2019 7:58 am

thelateinvestor43 wrote:
Mon Dec 02, 2019 8:52 pm
Guys don't worry, I will stay the course and invest in my index funds! This had nothing to do, I've only been doing this or even following this type of stuff for about 4 weeks, so it's all NEW to me.

I understand it goes up and down and I now understand that I still will own the same amount of shares whether the market goes up OR down. I realize it will come back up again. I read some guy saying that his "4 years of gains were wiped out in 2 week" in another thread from the past. He was panicking, but he still owned the same amount of shares and I'm sure the market came back since then.

I realize a lot of people panic and "get out" (sell shares) when they think the market is going to tank, but I KNOW that's not the thing to do as many people here have told me over the last few weeks and I agree.
What?

You didn't get the short term traders memo: "Buy on Labor Day, sell on Black Friday!" :mrgreen:

As we go through what could be considered a normal market pull back, keep this in your back pocket to remember for the long haul...

Image
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JoeRetire
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Re: [Dow] dropped 250 points today?

Post by JoeRetire » Tue Dec 03, 2019 8:06 am

CyclingDuo wrote:
Tue Dec 03, 2019 7:58 am
As we go through what could be considered a normal market pull back, keep this in your back pocket to remember for the long haul...

Image
You know it's going to be fun when the letter i is dotted with a little circle. But only for the word "inflation"? That's just odd.

I'm still planning to turn my TV on for sports. Hopefully that won't cause a crash.
Don't be a lemming.

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Re: [Dow] dropped 250 points today?

Post by firebirdparts » Tue Dec 03, 2019 10:39 am

thelateinvestor43 wrote:
Mon Dec 02, 2019 4:46 pm
What's going on with the Dow dropping 250 points today?
I guess you've noticed that in the news, there is sort of an expectation that somebody will write a headline about what the Dow Jones industrial average did that day, even if it's boring. There is a person who writes these headlines, and he or she has the easiest job in the world, but it's relentless. You have to do it every business day.

So like, in the morning, sometimes they'll put up a headline that says "stocks up on jobs report" and then maybe later they will have to change it so it says "stocks down on jobs report".

The truth is, they don't really have to interview anybody to see why they traded that day. They just make that stuff up. In fact, I think it's fair to say that we really don't know why there was such a big selloff last fall (20%). There wasn't a whole lot to explain that.

The Dow Jones or the S&P 500 usually returns about negative 20% to positive 30% in a years time. Sometimes it goes out of bounds.
A fool and your money are soon partners

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Re: S&P dropped 250 points today?

Post by krb » Tue Dec 03, 2019 11:43 am

thelateinvestor43 wrote:
Mon Dec 02, 2019 5:10 pm
mindboggling wrote:
Mon Dec 02, 2019 5:02 pm
You have posted many times in the past week or so. I don't mean to be harsh but you should not invest in the stock market at this time. An old saying goes: "don't invest in things that you do not understand". I think you should study the history of stock market prices. The market goes up and down all the time. Reasons given are after the fact. If you invest you are likely to panic-sell at the wrong time. A "fund of funds" with a small allocation to stocks might be OK, but bond prices go up and down, too. The SP500 dropped less than one-percent today. If this bothers you--be careful out there.

Good luck, and study up before you invest! If you are truly a "late investor", trying to catch-up is dangerous.
I invested in the FSKAX Total Marker Index. Why won't I be ok if I don't understand everything at this moment? The index will work automatically without my help all I have to do is add money.
His concern is the market can easily drop 30% or 40%. Unless there is a fundamental reason for this - Ebola wipes out 10% of the planet or nuclear war - it will bounce back in a day or two days or five years. But if you don't recognize that and panic and sell down 30% you will have great, great difficulty becoming whole again. Smart money invests in their desired AA and just leaves it, regardless of what the market does, unless there is a specific reason to sell (eg rebalancing or life change such as approaching retirement or retiring). If you are new and your risk tolerance is not great, you may sell in panic and permanently lose a lot of money. If you know you and you will not panic then no problem. Set it and forget it. A lot of people lost a lot of money in 2008 because they panicked. A lot of people didn't lose any money at all because 5 or 10 years later (or whatever) the market caught up. Those who didn't sell did fine. Those who sold were screwed.

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Re: [Dow] dropped 250 points today?

Post by beehivehave » Tue Dec 03, 2019 3:11 pm

It's pretty clear that there has been bad economic news in the last couple of days, so choose your reasons but the market has dropped in reaction: Consumer confidence has been down four months in a row, new housing starts are down, manufacturing activity is declining, we face new tariffs, there is an escalating trade war with China and other countries with no end in sight, etc.
(Even worse, Jeremy Siegal, who is usually wrong, sees Dow 30,000 on the horizon. Shades of Glassman and Hassett!)
Whether the stock market decline is temporary or not, nobody really knows, all we know is that it has dropped short term and pretty much why (despite those who claim otherwise).
The market has always recovered in the long run and that is more likely than not. But that long run can be pretty long and there can be a first time for everything.

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Re: [Dow] dropped 250 points today?

Post by Mactheriverrat » Tue Dec 03, 2019 4:05 pm

CNBC just said they called the market drop and have called every market drop for the last 10,000 years. LOL!
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Re: [Dow] dropped 250 points today?

Post by jhawktx » Tue Dec 03, 2019 4:39 pm

thelateinvestor43 wrote:
Mon Dec 02, 2019 4:46 pm
What's going on with the Dow dropping 250 points today?

I'm new to all this.

[Edited post title to read "Dow" rather than "S&P" -- moderator oldcomputerguy]
So what?

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Re: [Dow] dropped 250 points today?

Post by minimalistmarc » Tue Dec 03, 2019 5:03 pm

Mactheriverrat wrote:
Tue Dec 03, 2019 4:05 pm
CNBC just said they called the market drop and have called every market drop for the last 10,000 years. LOL!
They have called 1000 of the last 100 market drops so technically correct

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Re: [Dow] dropped 250 points today?

Post by minimalistmarc » Tue Dec 03, 2019 5:05 pm

beehivehave wrote:
Tue Dec 03, 2019 3:11 pm
It's pretty clear that there has been bad economic news in the last couple of days, so choose your reasons but the market has dropped in reaction: Consumer confidence has been down four months in a row, new housing starts are down, manufacturing activity is declining, we face new tariffs, there is an escalating trade war with China and other countries with no end in sight, etc.
(Even worse, Jeremy Siegal, who is usually wrong, sees Dow 30,000 on the horizon. Shades of Glassman and Hassett!)
Whether the stock market decline is temporary or not, nobody really knows, all we know is that it has dropped short term and pretty much why (despite those who claim otherwise).
The market has always recovered in the long run and that is more likely than not. But that long run can be pretty long and there can be a first time for everything.
Forget about all this nonsense.

WhiteMaxima
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Re: [Dow] dropped 250 points today?

Post by WhiteMaxima » Tue Dec 03, 2019 5:13 pm

set up a target AA (40% US equity 30% non-US equity 30% Bond, for example). rebalance and stay the course.

retired@50
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Re: S&P dropped 250 points today?

Post by retired@50 » Tue Dec 03, 2019 5:16 pm

thelateinvestor43 wrote:
Mon Dec 02, 2019 8:47 pm
rascott wrote:
Mon Dec 02, 2019 5:34 pm
thelateinvestor43 wrote:
Mon Dec 02, 2019 4:46 pm
What's going on with the Dow dropping 250 points today?

I'm new to all this.


I'm going to concur with another poster...I honestly don't think you are ready to invest in anything, much less equities.

Today was a nothing day. Stocks don't move in linear fashion.... over a day, week, month, year, or even decade.
I am ready to invest. I'm not scared with my measly $6k going up or down. I just didn't understand the news today.
Neither do the newscasters (talking heads) on TV. They are simply trying to put a "cause" to the movement in the market. The media's job seems to be to create reasons for what is happening. It's mostly worthless drivel, at least with regard to the financial media.

Regards,

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Re: [Dow] dropped 250 points today?

Post by lostdog » Tue Dec 03, 2019 5:19 pm

How were posters reacting on this board last December? Did anyone cash out and are still sitting on the sidelines?
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thelateinvestor43
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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Tue Dec 03, 2019 6:22 pm

LilyFleur wrote:
Mon Dec 02, 2019 10:52 pm
OP, to get a feel for the typical values of swings in the stock market, I recommend reading Random Walk by Malkiel or William Bernstein’s books. They are very helpful to get a sense for “Normal” and better appreciate expected variation.
I highly recommend this book:
https://www.amazon.com/Random-Walk-Down ... b_title_bk

Read it instead of the news. Please do not watch TV news--it is shallow and sensationalistic. If you want financial news, read the Wall Street Journal, but even though they do a great job with financial news, they cannot predict the future.
Thanks I was looking at this one and also "THE MOTLEY FOOL GUIDE TO ..." books at the bookstore tonight. I ended up getting Eric something's "Mutual Funds for Dummies" though, since I read his "Investing for Dummies" and kind of liked it. I think I might pick that one up in a couple weeks.

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thelateinvestor43
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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Tue Dec 03, 2019 6:26 pm

Does anyone know a good book or tutorial on how the stock market trading works on a day to day basis?

So the guys go in there and just start trading stuff? That's about all I know lol!

Do they start yelling out things like "Ok guys I got Microsoft stock up for bid for $someprice" ..... who will give me $someprice"?

"Going once, twice" sold to Joe for $223 a share!"

Thanks. I don't get ANY of this stuff. BUT I WANT TO! :shock:

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Re: [Dow] dropped 250 points today?

Post by abuss368 » Tue Dec 03, 2019 6:29 pm

Tune it out and stay the course!
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success."

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Re: S&P dropped 250 points today?

Post by H-Town » Tue Dec 03, 2019 6:42 pm

thelateinvestor43 wrote:
Mon Dec 02, 2019 8:54 pm
It's new to me so I'm excited, but I'm sure after a few months it will get old and I won't check my account to see if my measly $6k has went up $10 or down. Right now though it's fun and if I see $10 gain I feel ok!
You'll get past this phase. Investing is so boring.

retired@50
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Re: [Dow] dropped 250 points today?

Post by retired@50 » Tue Dec 03, 2019 7:20 pm

thelateinvestor43 wrote:
Tue Dec 03, 2019 6:22 pm
LilyFleur wrote:
Mon Dec 02, 2019 10:52 pm
OP, to get a feel for the typical values of swings in the stock market, I recommend reading Random Walk by Malkiel or William Bernstein’s books. They are very helpful to get a sense for “Normal” and better appreciate expected variation.
I highly recommend this book:
https://www.amazon.com/Random-Walk-Down ... b_title_bk

Read it instead of the news. Please do not watch TV news--it is shallow and sensationalistic. If you want financial news, read the Wall Street Journal, but even though they do a great job with financial news, they cannot predict the future.
Thanks I was looking at this one and also "THE MOTLEY FOOL GUIDE TO ..." books at the bookstore tonight. I ended up getting Eric something's "Mutual Funds for Dummies" though, since I read his "Investing for Dummies" and kind of liked it. I think I might pick that one up in a couple weeks.
Skip the bookstore and get a library card. All the classic investment books are likely available and FREE! Look into inter-library loans if your local branch doesn't have a particular book available.

Regards,

Topic Author
thelateinvestor43
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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Wed Dec 04, 2019 9:14 am

How come everyone gives conflicting averages for the historical S&P yearly return percentage?

I just read this on CNBC
"The average annualized total return for the S&P for the past 90 years is 9.8 percent. For 2017, in just under half a year, the S&P 500′s total return is 9.7 percent."

Others will say it's like 5% or 7%. Are they factoring in inflation?

I'd rather go with the 9.8%!! :D

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JoeRetire
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Re: [Dow] dropped 250 points today?

Post by JoeRetire » Wed Dec 04, 2019 9:23 am

thelateinvestor43 wrote:
Wed Dec 04, 2019 9:14 am
How come everyone gives conflicting averages for the historical S&P yearly return percentage?

I just read this on CNBC
"The average annualized total return for the S&P for the past 90 years is 9.8 percent. For 2017, in just under half a year, the S&P 500′s total return is 9.7 percent."
The S&P 500 Index hasn't actually existed for 90 years. It was originally the Composite Index and had only 90 stocks in it. In 1957 it was renamed and increased to 500 stocks.
Others will say it's like 5% or 7%. Are they factoring in inflation?
Adjusted for inflation, the average annual return is about 7%.
I'd rather go with the 9.8%!! :D
Go for it! Good luck.
Don't be a lemming.

Topic Author
thelateinvestor43
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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Thu Dec 05, 2019 5:59 am

Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%

INDIVIDUAL
FXAIX 500 index

ROTH
FSKAX Total Market
and FSPSX International

Sorry, I'm still new, so that excites me! Probably lose it all tomorrow though right?! :?

Oh well ......this is fun ! :D

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LiveSimple
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Re: [Dow] dropped 250 points today?

Post by LiveSimple » Thu Dec 05, 2019 6:47 am

You can only take a horse to the water, you cannot make it drink !!!

Daryl
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Location: Malvern, PA (I like to sleep near my money!)

Re: [Dow] dropped 250 points today?

Post by Daryl » Thu Dec 05, 2019 6:48 am

thelateinvestor43 wrote:
Thu Dec 05, 2019 5:59 am
Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%
No! What you want to see is the market continuing to decline as you continue to invest so that the dollars you are investing buy more and more shares. Then, at the end of your working years, you want to see the opposite (market values increasing) so that each share you bought years and years ago returns more and more cash!

Topic Author
thelateinvestor43
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Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Thu Dec 05, 2019 8:21 am

Daryl wrote:
Thu Dec 05, 2019 6:48 am
thelateinvestor43 wrote:
Thu Dec 05, 2019 5:59 am
Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%
No! What you want to see is the market continuing to decline as you continue to invest so that the dollars you are investing buy more and more shares. Then, at the end of your working years, you want to see the opposite (market values increasing) so that each share you bought years and years ago returns more and more cash!
You're being funny right? I can't put anymore in the ROTH till next year though. I read that you're supposed to keep putting in no matter what the markets doing and not try and time the market. But I see what you're saying. Maybe Trump will keep tweeting about the economy for the next few months and the index will keep falling! :)

rai
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Re: [Dow] dropped 250 points today?

Post by rai » Thu Dec 05, 2019 8:39 am

Back in 1987 the Dow dropped 22.7% in one day if that happened today it would be a 6300 point drop.
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair

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RickBoglehead
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Re: [Dow] dropped 250 points today?

Post by RickBoglehead » Thu Dec 05, 2019 8:42 am

thelateinvestor43 wrote:
Thu Dec 05, 2019 5:59 am
Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%

INDIVIDUAL
FXAIX 500 index

ROTH
FSKAX Total Market
and FSPSX International

Sorry, I'm still new, so that excites me! Probably lose it all tomorrow though right?! :?

Oh well ......this is fun ! :D
Stop looking. Day to day is irrelevant, you should be focused on 30 years from now.

Have you read the Wiki?

Have you read The Bogleheads Guide to Investing?

If you want to trade daily, you picked the wrong forum.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

Topic Author
thelateinvestor43
Posts: 170
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Location: Westbrook, Maine

Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Thu Dec 05, 2019 9:10 am

RickBoglehead wrote:
Thu Dec 05, 2019 8:42 am
thelateinvestor43 wrote:
Thu Dec 05, 2019 5:59 am
Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%

INDIVIDUAL
FXAIX 500 index

ROTH
FSKAX Total Market
and FSPSX International

Sorry, I'm still new, so that excites me! Probably lose it all tomorrow though right?! :?

Oh well ......this is fun ! :D
Stop looking. Day to day is irrelevant, you should be focused on 30 years from now.

Have you read the Wiki?

Have you read The Bogleheads Guide to Investing?

If you want to trade daily, you picked the wrong forum.
I've read the wiki. I am not into trading thanks. I just want some good indexes. But I like looking as I'm new to it right now. It's still fun seeing day to day, at least for me, but no I'm not going to post about day to day.

I might be dead 10 years from now, let alone 30. My father and grandfather both died in their 50's and I'm approaching 50.

wolf359
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Re: S&P dropped 250 points today?

Post by wolf359 » Thu Dec 05, 2019 9:27 am

Mactheriverrat wrote:
Mon Dec 02, 2019 5:32 pm
2pedals wrote:
Mon Dec 02, 2019 5:24 pm
Nobody knows nothing, it's all you need to know about today.

https://www.youtube.com/watch?v=fLCfkmaqI6k
The MILLIONS of people who have their personal 401-k's and ride through the pain of a bear market when they should have switched to bonds - The when the bear market was over switched back into growth funds. Their the one's that don't really know anything. Then they are suckered in giving their money to like's of Morgan Stanley's of the world for a 1% to 2% fee. And that's after years of no guidance in their 401-k accounts.
Not sure I agree with this.

I have been 100% stock in my 401k for more than 30 years. I have gone through multiple bear markets.

The strategy of switching to bonds prior to the bear market, then switching back to growth funds when the bear market is over is flawed. It is called "market timing." The trick is that you don't know when a bear market is about to begin, and you don't know when it's over. There are people who managed to get out ahead of 2008, but are still waiting for the "dead cat bounce" to end and have missed the recovery.

Buy and hold works.

I'd say that most people who are anxious about the market and are closely watching their 401-k balances during a bear market probably sold out at the bottom. Most people who don't understand 401-ks and simply put the money in because they were told to, don't watch the market and have no pain. About half the people with 401-ks don't understand them and don't put any money in. This is starting to change with auto-enrollment, but I believe the level of non-participation is still in the 40's.

wolf359
Posts: 1852
Joined: Sun Mar 15, 2015 8:47 am

Re: [Dow] dropped 250 points today?

Post by wolf359 » Thu Dec 05, 2019 9:37 am

thelateinvestor43 wrote:
Thu Dec 05, 2019 9:10 am
RickBoglehead wrote:
Thu Dec 05, 2019 8:42 am
thelateinvestor43 wrote:
Thu Dec 05, 2019 5:59 am
Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%

INDIVIDUAL
FXAIX 500 index

ROTH
FSKAX Total Market
and FSPSX International

Sorry, I'm still new, so that excites me! Probably lose it all tomorrow though right?! :?

Oh well ......this is fun ! :D
Stop looking. Day to day is irrelevant, you should be focused on 30 years from now.

Have you read the Wiki?

Have you read The Bogleheads Guide to Investing?

If you want to trade daily, you picked the wrong forum.
I've read the wiki. I am not into trading thanks. I just want some good indexes. But I like looking as I'm new to it right now. It's still fun seeing day to day, at least for me, but no I'm not going to post about day to day.

I might be dead 10 years from now, let alone 30. My father and grandfather both died in their 50's and I'm approaching 50.
Hey, you're like me!

I still read everything I can about the market and various strategies. I just want to learn all I can. I'm pretty much a finance nerd.

It's fun. It's numbers. And it's money.

Some advice, though.

Take the strategy that you've picked, and document it in an Investors Policy Statement. Be very clear in this document what actions you would take under the different market conditions. Be specific on your holdings and your asset allocations. State when you are allowed to change your strategy, and under what changing conditions (usually related to changes in your life and risk tolerance.)

The reason for this is so that if you learn something new, you don't go changing your strategy willy-nilly. You have to commit to a strategy for a minimum of 5 years for it to work, but it's better if it's for 10-20 years. Investor behavior, including bailing out of "losing" strategies, hurts your returns more than picking the wrong investments.

I also used to check my balance daily, and even multiple times a day. The general advice is against doing so, but I couldn't help it. If you take no action, this is fine. I started growing out of it after a few years.

I also read and participate in this forum. It's a way to be helpful and learn without doing damage to my portfolio.

Daryl
Posts: 573
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Location: Malvern, PA (I like to sleep near my money!)

Re: [Dow] dropped 250 points today?

Post by Daryl » Thu Dec 05, 2019 5:53 pm

thelateinvestor43 wrote:
Thu Dec 05, 2019 8:21 am
Daryl wrote:
Thu Dec 05, 2019 6:48 am
thelateinvestor43 wrote:
Thu Dec 05, 2019 5:59 am
Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%
No! What you want to see is the market continuing to decline as you continue to invest so that the dollars you are investing buy more and more shares. Then, at the end of your working years, you want to see the opposite (market values increasing) so that each share you bought years and years ago returns more and more cash!
You're being funny right? I can't put anymore in the ROTH till next year though. I read that you're supposed to keep putting in no matter what the markets doing and not try and time the market. But I see what you're saying. Maybe Trump will keep tweeting about the economy for the next few months and the index will keep falling! :)
Negative. My goal is to accumulate as many shares of the Total Stock Market fund as I can before retirement. Decreasing prices during the accumulation phase helps me achieve that goal. Then, once I have a whole lot of shares, I'd like to see them increase in value (during retirement), hopefully faster than I can spend it!

expat
Posts: 743
Joined: Mon Mar 10, 2008 9:07 pm

Re: [Dow] dropped 250 points today?

Post by expat » Thu Dec 05, 2019 6:00 pm

The market tends to fluctuate.

Topic Author
thelateinvestor43
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Location: Westbrook, Maine

Re: [Dow] dropped 250 points today?

Post by thelateinvestor43 » Fri Dec 06, 2019 1:14 am

Daryl wrote:
Thu Dec 05, 2019 5:53 pm
thelateinvestor43 wrote:
Thu Dec 05, 2019 8:21 am
Daryl wrote:
Thu Dec 05, 2019 6:48 am
thelateinvestor43 wrote:
Thu Dec 05, 2019 5:59 am
Wow, my Fidelity account is up $60 in one day! Is that good? +0.39%
No! What you want to see is the market continuing to decline as you continue to invest so that the dollars you are investing buy more and more shares. Then, at the end of your working years, you want to see the opposite (market values increasing) so that each share you bought years and years ago returns more and more cash!
You're being funny right? I can't put anymore in the ROTH till next year though. I read that you're supposed to keep putting in no matter what the markets doing and not try and time the market. But I see what you're saying. Maybe Trump will keep tweeting about the economy for the next few months and the index will keep falling! :)
Negative. My goal is to accumulate as many shares of the Total Stock Market fund as I can before retirement. Decreasing prices during the accumulation phase helps me achieve that goal. Then, once I have a whole lot of shares, I'd like to see them increase in value (during retirement), hopefully faster than I can spend it!
That's timing the market, which DOESN'T WORK they say. I agree that its better to by low, but you know what they say .... The Bogle philosophy is to keep investing no matter what the markets doing and "stay the course" ... or at least that's what I thought I read.

What makes you think that things will go as smooth as you desire? That the market will continue to decline until you're ready to retire whilst you keep adding money and then all of a sudden will start to go the other way once you retire? That's a pipe dream!

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