Stock Market
By bobmnu
@bobmnu (8157)
United States
August 16, 2007 8:22pm CST
Today the Stock Market dropped 300 points and then recovered most of the loss - down 15 points from the start of the day. I have several stocks and mutual funds that I don't know if I made or lost money today. I do know that if I sold all the stocksand mutual funds I owned, I would have made more money that I invested in the stocks and mutual funds. I have been investing on a small basis over time. The people who lost money today are the people who borrowed money to buy stocks. The term is "leveraging". You borrow money and buy stocks then sell them in a few days to make a profit and pay the money back and the difference is you profit. If the market drops you still have to pay back the amount you borrowed and you lost money.
Sam Walton was asked one day when the market dropped over 200 points and his net worth dropped, $1,000,000, and his responce was I only lose when I sell my stocks. If you look at the stock market over the long haul it has always made money for people when you look at any 10 year period. If you sold all your stock on Black Friday (1929)and had been investing in the market for the previous 10 years you would have made a profit.
Do you think the media is making too big a deal over the ups and downs of the stockmarket and playing on peoples fears?
2 people like this
2 responses
@Daelin (683)
• Brazil
18 Aug 07
I think it is a big crises but the world is so different from 1929 that I don't think we should be afraid of something like that happening again.
As you pointed out you only lose when you sell the stocks. The investors know that now.
@whyaskq (7523)
• Singapore
17 Aug 07
What goes up will come down, and what goes down will come up. I guess this is a common saying in the stock market. I understand that in the stock market, there is such a thing as cutting loss in a correction if one happen to get out too late. In my opinion, if one is rich and have spare cash, it does not matter if one continue to hold on to his stock for years. He could be a multi-billionaire in years to come. The media is not making a big deal. It is educating and highlighting the risks to retail investors and speculators.
