It's official: worst stock market year since 1931

[Lumpy]

If you owned stock in 2008, you lost. Blue chip, distributed portfolio, what have you. Western civilization shrank in 2008. And 2009 looks like a year of aftershocks- if we're lucky.

[Cisco]

I've lost everytime I've bought stocks my entire life, including this year, so meh. I'm sure plenty of people bought stocks for a song this year that will make them millionaires within the next few years. A working-class friend of mine made 10s of thousands in the stock market this year. He bought and sold a bunch of one of the financials that didn't go under at just the right time - Lehman Brothers, I think.

[Rand Rover]

So? The more important question is--how does this information affect your investing strategy?

As a 32-year-old, this information does not affect my investing strategy at all--I'm plowing as much money into stocks as I can.

[Bryan Ekers]

I figure my pumpkin stock should pay off any day now. I've been holding it since September.

[friedo]

As a 32-year-old, this information does not affect my investing strategy at all--I'm plowing as much money into stocks as I can.

That.

[iamthewalrus(:3=]

The only change to my investment strategy is that I've realized that I'm more comfortable with a larger emergency fund.

So I'm holding off on stock purchases (and any other investments) until I get it to where I want it. I'm almost there, so I expect to continue making regular stock purchases soon.

[dre2xl]

Investment-wise, this year started out shitty, but as it went on, I became happier than not at all with the buying opportunities. The volatility also made for great day-trading.

To use an old analogy: if you bought a $5 cheeseburger everyday, and then one day, you went in and found the cheeseburger price dropped to $4, should you be upset or be happy? There are incredible deals out there, and I would trust McDonald's to outlast the USA.

[Duke]

As a 32-year-old, this information does not affect my investing strategy at all--I'm plowing as much money into stocks as I can.

I'm looking at potential Dow 6000 here. Crazy to buy stocks now before the bottom. Commodities are where it's at now.

[Fuzzy Dunlop]

Investment-wise, this year started out shitty, but as it went on, I became happier than not at all with the buying opportunities. The volatility also made for great day-trading.

To use an old analogy: if you bought a $5 cheeseburger everyday, and then one day, you went in and found the cheeseburger price dropped to $4, should you be upset or be happy? There are incredible deals out there, and I would trust McDonald's to outlast the USA.

Not if they start charging $5 for a cheeseburger.

[Una Persson]

I lost in the mid-6 figures in stock value this year, which was a little depressing. My overseas investments also lost 6 figures as well, which was depressing in an abstract way, since the exchange rate reversal reduced the impact. It was a profound year of suck all around. I guess since I didn't sell anything it may come back or even boom again, but who knows. It hasn't affected my standard of living but it has pushed back retirement until things get better (I could have retired last year, but my goal was in 4 more years. With today's market it would be 10 more years).

What I don't understand is why my broker claims the sale value of my tax-free municipal bonds has dropped by almost 30%. A tax-free investment, backed by the taxing authority of the government, AA quality or better, *and privately insured*, with a 7% return, and that's so "risky" that it's dropped that much in value? How's that happen? :confused:

[ParentalAdvisory]

I'm looking at potential Dow 6000 here. Crazy to buy stocks now before the bottom. Commodities are where it's at now.

You say that as if you knew where the bottom was. You can't know this.

[PunditLisa]

I didn't need an official report to know that it sucked donkey balls. What really pisses me off is that government is helping to bail out people who overextended themselves, but are doing squat for folks like us who lost their shirts doing the "responsible" thing.

For years, instead of going on fabulous vacations, we lived minimally and pocketed that cash. Compounding interest and all.

Ha!

So, screw it. I'm taking some fabulous vacations in '09, starting with a week in St. John at the end of January.

[Duke]

You say that as if you knew where the bottom was. You can't know this.

No, but I can look at economic indicators and see that the economy and the Dow are moving in opposite directions. Usually a sign that the Dow will realign shortly.

[dre2xl]

No, but I can look at economic indicators and see that the economy and the Dow are moving in opposite directions. Usually a sign that the Dow will realign shortly.

And yet you fully expect that commodities move in opposite directions, which suggests inflation, which suggests that money is somehow getting in the hand of consumers?

[Rand Rover]

Duke, I read something a while back that said that some extremely large percentage of the stock market's return for a year is made in only a small number of days (sorry for my crappy memory and my unwillingness to google up more specifics, but the numbers were shocking). Therefore, if you have a market timing philosophy that keeps you out of the market, you are setting yourself up for possibly missing these days, which could negate any benefit to your market timing if you do turn out to be right.

Also, how are you investing in commodities (i.e., trading futures yourself, hiring a trader, in a fund that trades)? Commodities are something I've always been interested in but I don't know the ins and outs of doing this without just trading myself (which I don't have time for).

[dgrdfd]

Duke, I read something a while back that said that some extremely large percentage of the stock market's return for a year is made in only a small number of days (sorry for my crappy memory and my unwillingness to google up more specifics, but the numbers were shocking).

See this for more information:


. . . the S&P 500 Index returned on average 8.4% a year between July 1, 1997 and June 30, 2006. Based on an average of 252 trading days a year, if someone missed the best 10 trading days in those 10 years, the return would’ve been only 3.4% a year.


Source: http://thefinancebuff.com/2007/07/out-of-market-and-meaningless-stats.html

Of course as the site I linked to mentions, the odds of being out the best 10 days and only those days are highly unlikely.

[ParentalAdvisory]

No, but I can look at economic indicators and see that the economy and the Dow are moving in opposite directions. Usually a sign that the Dow will realign shortly.

Hey, if you think this is the way to determine a bottom, why not short the market and make a killing? It sounds so... foolproof. I might even subscribe to your newsletter.