Moving back down the ASX 5000 levels

Well said - think you have to move with the times. Margin lending is probably great for the first few years of a bull market, but I reckon there is half a chance we drift sideways for 12 months or more now.

Unless we get a very quick turnaround recovery, too many investors have been stung by this relentless drop, and I would think cash and property will be the flavour of the month.

Tim

 

Looking at my chart, I would say we have a good chance to be at the bottom now.. I would suspect sideways movement before we continue our up trend..

 

It’s a long way to the bottom if nothing changes.

EDIT - spooky >>> Asian markets fall on U.S. fears - Stocks & economy - MSNBC.com

 

IMHO
fear and margin calls are triggering further falls
and the US problems are nowhere near over yet.

I can't help thinking that we will see more of the same...

 

Yep...I tend to agree with you.

 

looks like we are in trouble tomorrow!

stock markets are crashing!

China and hong kong down 5%

India down 10%
DAX down 6%
FTSE 100 down 4.5%

at the moment! ouch!!

I hope comsec processed all my withdrawels

 

ouch
me thinks we should run for the exit

 

looks like the Peter Spann 'depression' has come a little early.. he predected a large crash in 2009/10

 

It came early because in recent times we had bigger growth than normal,
We simply brought forward the correction.
IMHO

 

a correction is a 10% drop, a crash is a 20% drop (which has now just been passed) 30%, well thats a depression!!!

 

Without stop loss/exit strategy, money management ect, you will NOT survive in the market.

In trading/investing you need strategy and tactics.

Strategy = doing the right thing
Tactic = doing things right

PS:
US Futures on the Dow Jones Industrial Average down 514 points for the day.

Have a nice trip.

 

Nicely worded Tropo.

From a slightly different direction to most of the headline directions, if the US does drop another 500 points todayeek:) it will be disasterous for an investment class.......... won't it?

Well, 500 points would probably drop it to about where it was 15-16 months ago. Not 15-16 years ago, months ago.

Now when the housing market over heated a few years back, I never expected it to stay at those peaks, I simply got the properties revalued at relatively high amounts, setup some LOC's for investment and then wasn't too worried about it. If the properties went sideways for three years or dropped in value by 20% it was all ok because in the medium to longterm I had made the personal decision that property was a good investment. Some of those properties probably did drop 10-20% from the peak for a period too. When that happened I didn't rush out and think I'd lost 20% and I had to sell!

Similarly, I have made the personal decision that parts of the stockmarket are a good longterm investment and that my approach is pretty simple. Firstly, buy good quality companies at relatively good valuations that in one way or another can contribute to 'feeding themselves'. Secondly, structure myself so that I don't have to sell these stocks unless something so disasterous happens that it probably won't matter anyway. Thirdly, let time do its thing.

From a personal/emotion point of view, I really don't care if the DOW falls 500 points today and another 300 points tomorrow as in the longterm I think it is probably creating opportunity and deflating an overheated market.

Having said that, I'm certainly aware that this is creating a very serious issue for many and I am sympathetic to that situation. When you hear of 7% market falls in India you also start to hear of people throwing themselves out of windows. While the correction was probably to be expected it will certainly hurt a number of people.

 

ASX will be down again today by the looks of the SPI down 158!

THis has gotta be fun (not)!!

Anyone suffering badly yet??

Tim

 

Whilst the long-term view is fine, you still get burned holding some stocks during a correction.

Obviously if the underlying business is untenable in anything less than a boom market then it will collapse - worthless.

But, even with a good underlying business a company with serious debt problems may make fire sales and lose the shareholders wealth. Also, issuing more equity at bargain prices will dilute you share.

And of course we will see lots of takeovers, larger cashed up operators will buy up the company at a bargain price and delist it - either giving you the paltry current price or issue you with scrip in their company instead of real money so you are stuck with them whether you like it or not.

So I reckon you keep the quality businesses but watch of market consolidations.

Cheers,

Rob

 

Aussie stocks set to plummet | The Australian

we are looking at a 265 point fall at open.

 

Hi Rob.

Yep. So don't buy a business that is only tenable in boom times and don't buy a company with large debt levels.

 

So far - so good ...

 

Alan,

I would not compare real estate with Stock Market. Always compare apples with apples.

I have got no idea how much DOW may drop tomorrow...but we may see another 1000 point drop in the future, not necessarily tomorrow.
Problem is that market may drop ‘X’ amount of points from current level, hit the bottom at one stage, and stay in the sideways move for years !!
How can you define a ‘long term’ approach and how you can measure it - it is up to you.

It’s amazing that a lot of people are trying to catch falling knife and predict where bottom is, buying stocks at the wrong time. But on the other hand none of those ‘pickers’ care when their holding drops in value 30% - 50% or more.
A lot of people never experienced bear market so all new investors believe that good stock always rebounds. This might be true (Telstra can not rebound to previous highs for the last 6 or 7 years), but my question is how long you or anybody else is willing to wait to get money back?.

I think it was in 1974 or 75 when people invested money in BHP and after 10 years they got their money back.
Freezing your money in bad investment and waiting for rebound is not a good idea. You are practically losing money, because you are unable to invest somewhere else. That is what opportunity cost is all about.
If what you said is your strategy, that is fine with me.
After all it’s your money.

 

Tropo - what would be your thoughts on riding out the current situation if you were in a index fund?

 

I would play (on my own) short side of the market to balance potential loss.