RE: Here's hoping you didn't miss the bottom of the market...

The truth steve wrote:

...the true unemployment rate is over 10%, most experts are using that rate.

INCORRECT!

Unemployment is at 6.7% and is forecasted to plateau at 7.6% by mid 2009.

Thanks so much, brother. Now I need to check with I Love Peeps and find out where to invest my gold (now that I can finally dig it out of the back yard.) You two are the best!!!!

True Beleever wrote:

Thanks so much, brother. Now I need to check with I Love Peeps and find out where to invest my gold (now that I can finally dig it out of the back yard.) You two are the best!!!!

Well, at least you're funny! In all seriousness, no matter how you go about it, I wish you financial GREATNESS in 2009!

keep speakin' the truth brother. i can't wait for the next couple years. i put 50k in at 8400, another 15k at 8000, and was lucky enough to throw in 10k after the bell close on the lowest day (7400). we'll see what that 75k is worth in 22 years when i retire (at 59 1/2).

have a great 2009!

My wife and I decided to divert 100% of her income towards her 401k to try to max it during the last few months of 2008. Let's see whether it pays off eventually.

Usually agree with most of your advice, but the majority of those mortgage applications are people refinancing because interest rates are so low. Most things I've read suggest the housing market is still gonna struggle for most of 2009.

With that said, I agree most people are never going to time the market so they might as well be putting in money while it's cheap.

Please don't curse the markets flagpole... my money is at stake here.

Flagpole wrote:

By the time they finally feel like getting back in, the DOW will be above 10,000 -- a far cry from the low of 7,400, and too late to take advantage of this super low market.

At 10,000 the DOW will still be lower than it has been for 75% of the last 10 years. If one were to wait until then he would definitely benefit from the drop in the market. Besides most market timing models would have you enter at a value lower than that.

Retailer numbers coming in January.

Blowing Rock Master wrote:

At 10,000 the DOW will still be lower than it has been for 75% of the last 10 years. If one were to wait until then he would definitely benefit from the drop in the market. Besides most market timing models would have you enter at a value lower than that.

You are correct, and as you know, I'M not the one who wants to time markets. My point was to those who live and die by timing markets that they MIGHT have missed the bottom. Just best to not even try. Regular twice monthly contributions and then once in a great while extra lump sums if you feel the market is down. Once you're doing more than 15% of your salary, if you want to speculate a bit, then go ahead.

2009 will be a year of shocking corporate earnings reports. We have yet to really see the market respond to anything more than a quarter of bad news. Markets are forward looking, but not as much as they used to be. No one will hold or buy when corporate profits nose dive in 2009.

Also, any recovery will smash up against an energy price spike. Oil companies are slashing there capacity and won't be able to respond when demand is restored. Also, exploration activity is going to all but cease in 2009. That will just make the price spike even worse.

Even with the Obama stimulus, 2009 will be a very bad year for the market. Look for the market to slide back under 8000 in 2009.

John Smallberries wrote:

2009 will be a year of shocking corporate earnings reports. We have yet to really see the market respond to anything more than a quarter of bad news. Markets are forward looking, but not as much as they used to be. No one will hold or buy when corporate profits nose dive in 2009.

Also, any recovery will smash up against an energy price spike. Oil companies are slashing there capacity and won't be able to respond when demand is restored. Also, exploration activity is going to all but cease in 2009. That will just make the price spike even worse.

Even with the Obama stimulus, 2009 will be a very bad year for the market. Look for the market to slide back under 8000 in 2009.

Could be. I think you're right about the price of energy. Oil just CAN'T be long at the cheap level it has been recently. Again, remember that I didn't call a bottom -- just said it's possible that the bottom has come and gone. Even if the DOW dips below 8,000 again as you suggest, that's still not 7,400. I would love to see the DOW hang around 8,000 for a while yet. I've got more accumulating to do. An energy spike though isn't ALL a bad thing. Usually one part of an energy rise is due to demand. If demand is high (especially on emerging markets) this means that production is on the rise, and could be a signal that the recession is ending.

For all the nitpicking about Flagpole's original post, he's spot on if you're an investor (or potential investor) with a long-term horizon. While there are signs that the market might go south again in 2009--including a looming crisis in the commericial real estate market, poor financial statements as large companies complete their write-downs of losses from investments in bundled mortgage securities and other gambles, increasing awareness of a "second wave" of mortgage instrument failures due in 1-2 years, and a potential spike in energy costs as OPEC and other oil-rich countries seek to control ouput--the MAIN point of his post is: get in the market if you're not going to get out for at least 5-10 years. Smaller, patient investors can reap the benefits of larger investors' movement to bonds and other "safe" holdings in the interim; once they move back into the market, smaller, more agile investors stand to benefit, long term, as indices rise with economic recovery.

I'm not a big believer in timing the markets, either. One, I'm not smart enough, and two, I'm too busy to try and overcome that. But we've maxed out our 401k contributions--thank goodness my wife still has a matching employer!--because retirement is decades away.

Good luck to everyone.

in the shorts wrote:

Retailer numbers coming in January.

The hysteria following the retail YE is what I am waiting on. I expect a big short period drop as the market digest those numbers. Then I'm all in.

gregward wrote:

the MAIN point of his post is: get in the market if you're not going to get out for at least 5-10 years. Smaller, patient investors can reap the benefits of larger investors' movement to bonds and other "safe" holdings in the interim; once they move back into the market, smaller, more agile investors stand to benefit, long term, as indices rise with economic recovery.

Except that, a 5-10 year time frame is too short. The Dow could very well be below where it is now, and perhaps much lower in 10 years. A possibility that no buy-and-hold investor can possibly fathom, but the halcyon days of the US have passed it by, and if Obama makes good on his policy pledges, I fear the long-term effects will be calamitous, as they were in Japan. Debt deleveraging is a painful, arduous process, and if we continue our misguided, tampering efforts, it will ensure a chronic malaise. Prince was correct -- it was time to party like it's 1999.

The market may sniff 10,000 early this year and the Flagpole Willys of the world will express their "vindication" ad nauseum as they already are. And that is a contrarian signal.

Sagarin wrote:

The market may sniff 10,000 early this year and the Flagpole Willys of the world will express their "vindication" ad nauseum as they already are. And that is a contrarian signal.

Sagarin,

After all these years and financial discussions with me and you think that I'll declare vindication if the DOW hits 10,000 this year? Holy crap you don't read anything I write then. I couldn't care less about what the DOW hits this year or next year or the year after that or even 10 years from now. I'm betting simply that the money I put in and the money I have put in over the last almost 20 years will return me a hefty sum by the time I retire and move a lot of it to bonds in 18 more years. If the DOW does a slow climb and ends in 18 years at its high of 14,100, then I will be more than fine. It should do much better than that though.

Even the 10 years you mention is too short a time for me to be concerned with, and that should be even more so for a new investor under age 30.

The market may sniff 10,000 early this year and the Flagpole Willys of the world will express their "vindication" ad nauseum as they already are. And that is a contrarian signal.

++++++++++++++++

well all I know is I have the all clear signal from Flagpole---time to move back in!!

Flagpole wrote:

Even the 10 years you mention is too short a time for me to be concerned with, and that should be even more so for a new investor under age 30.

Flagpole, I jest somewhat, but I don't want investors to get lulled into complacency, believing that the next 20 years have to be just like the last, with very little grounding in formal economics. The be careful what you wish for phrase comes to mind for all of the bushy-tailed 20-somethings on here who voted for "change."