Is anyone here about to start buying stocks now that prices are low?

[ecstatic]

Poll question: Is anyone here about to start buying stocks now that prices are low?

I've never owned stock before but a lot of talking heads are saying this may be a decent time to get into it.

[marmar]

1. Listening to talking heads is bad for your fiscal health.....

n/t

[Super62]

11. We are paying off our house

That way, we have a place to stay rent free :). The money that was going for the house payment will now be reinvested once we think the market is at or near bottom. If you have cash, it will be a good time to buy. An incredible opportunity as long as it doesn't collapse completely!

[hobbit709]

2. Only if I get some of that $700 billion free money.

I can't even afford penny stocks right now.

[Virginia Dare]

3. Nobody knows where the bottom is...

people need to hold onto their cash right now.

[AllieB]

4. I already have.

I'm young enough to wait out the recession.

[ecstatic]

6. are you managing it yourself online or through a firm

If a firm, may I ask which one?

[AllieB]

29. Online-TD Ameritrade.

I have a 401K through work, and it's tanking big time. :-(

[grannie4peace]

5. no money to buy stocks :):)

[Sabriel]

36. I was just going to say, "Buy with WHAT, exactly?" n/t

[Sherman A1]

7. No

My 401k has taken a 36% hit since the first of the year and the few stocks I do own are, shall we say just a bit lower than they were, so I will hold off. When my AB stock sells I will use the proceeds to fund my IRA for next year. That will at least save me a few dollars and allow me to hold more in reserve.

[ProdigalJunkMail]

8. lots of numbers point toward 9000 right now

think i might wait a little longer...hanging onto my gold...cash...and currencies...but won't stay out forever.

sP

[KharmaTrain]

9. Who Said We Hit Bottom???

We still don't know how much further down this thing is gonna go. It sure doesn't look solid even at 9500. A couple months ago, I heard people project the "floor" at 11,500, then 10,500...and both times we had a "dead-cat" bounce...people shorting...a temporary breather until the next hit of bad financial news wiped away any gains and down the tubes we went again. There's only so much of that game even the craziest day trader will play. Now these same people are saying the bottom could be as low as 7500...and with the volitility going on, they could be right.

Right now a lot of people have pulled out of the market and have stashed their cash in T-Bills and CDs...locking that money away for 6-months or a year or more...this money won't be coming back into the market too soon...thus the credit crunch remains (as banks have to protect those assets) and the market will continue to flail. Until the credit mess of mortgages and personal debt is worked out, the money will stay on the sidelines.

[Hugabear]

26. I think 7500 is optimistic

We'll be lucky if it doesn't go down to 5000 or so.

We're in a MELTDOWN. The entire financial structure is on the verge of collapse, we're going to have to do some serious rebuilding. This is no different than having to rebuild after a major war.

[gvstn]

10. Back before Y2K

When stocks were around 10,500 a guy who made a lot of sense was saying don't leave the stock market because of Y2K fears but because stocks were over valued. He said the true value was around 7,000 to 7,500 based on earnings ratios. Nobody wanted to hear it as this was the time of do-it-yourself day-trading and 12% returns without even trying. You couldn't lose--and the first hit didn't come until late 2000.

Since then the market seems to slowly be coming around to his scenario. With the devaluation of the dollar an index of 9,000 to 9,500 seems about where things will level off if this guy was right about true value (ie. 7,000 adjusted up for inflated dollars). If I had some money I'd start looking but be wary of Alternative Energy as the next bubble.

This from my own admittedly limited understanding.

[deaniac21]

14. In Sep of 02 the Dow was at 7591

Oct of 07 13930

It never trends down for very long

[slipslidingaway]

20. If you look at another 20 year segment chart the results change...

1900 - Present Monthly
http://stockcharts.com/charts/historical/djia1900.html


1960 - 1980 Daily
http://stockcharts.com/charts/historical/djia19601980.html


1929-1958
http://3.bp.blogspot.com/_r_4bas-lh0U/SOwKwihiHuI/AAAAAAAACGo/mFoYt9iASxA/s1600-h/25yrs.bmp

[deaniac21]

28. The trend is always UPPPPPP

[slipslidingaway]

32. Over the long haul yes, since 2000 my thoughts have been that

we will be in a period similar to the 60's - early 80's where the market had wide swings, but basically went sideways...and that might be the optimistic view.

It really depends on how much money and how long someone has until they retire.

The 80's and 90's were great, working off the excess debt will not be as pleasant and that is why I posted the chart from 1900 to present.

1900 - Present Monthly
http://stockcharts.com/charts/historical/djia1900.html

[TexasObserver]

34. The relevant time period is the trench from 1987-1990

This decline is similar to the 1987 collapse, not the drop in 1999, which was under a year.

This thing is not hitting bottom any time soon. There is simply too much bad paper out there, undermining the entire system. We are not in a depression, but we are in a really bad recession, and like the one brought on by seven years of Reagan-Bush leadership, this one is ravaging the entire system. That's what happens when there is no effective limitation on leverage, when government debt is out of control, when thoughtless tax cuts are made and the federal budget is run on debt.

It is my opinion that anyone buying now is buying while the market is too high. The DOW still has 400-1400 points yet to lose in this decline.

If you are willing to let your investments ride for at least 3-4 years, then you should be a buyer, as long as you're buying every month or every quarter. The DOW will recover. It may take 3 years, but it will.

By the way, some of those bargins may end up in bankruptcy, and that could hurt.

[MilesColtrane]

12. I buy the same dollar amount every month regardless of the share prices.

[Beausoir]

19. Same here. Long term, steady growth is my goal.

[AllieB]

30. Me too.

I've never played it like a lottery game, and I'm pretty conservative.

[SmokingJacket]

13. I would if I had any money left. nt

[melm00se]

15. timing the market (high or low)

is a fool's errand. dollar cost averaging, over time, with a highly diversified portfolio, is the most effective way of investing.

[JackRiddler]

16. Sure, soon as they let me call myself a bank...

My business proposal is as follows: I'll accept a dollar deposit, lend out eight to anyone breathing at variable interest, issue derivatives on the loans and sell these to a Norwegian pension fund, buy swaps on both sides of the derivatives, and relabel all of that as assets so that I can leverage a new credit at 40:1.

Then I'll take 70 percent of that to the market so that I can buy and short the same stocks simultaneously based on charts, without knowing which businesses they're in because that would jinx it, put another 20 percent into paying myself via offshore entities, use 5 percent for lobbying and campaign contributions for a later bailout, and keep five percent for my legal fund and/or getaway vehicle. Also, I'll hire mathematicians as CEO and CFO and make sure I don't understand anything about the obscure algorithms they employed when time comes for them to get a subpoena.

Okay?

[davekriss]

17. Waiting for 8500 or...

...a sustained uptick, whichever comes first.

On edit: I moved to 60% cash when the DOW was just under 13000.

[Kip Humphrey]

23. ...or 7700

100% cash & gemstones since DOW was ~13176

[CoffeeCat]

18. I'll wait for the bottom...

...which is most likely 0 across the board.

Then, I'll start buying!

[Hugabear]

27. If the stock market reaches 0, then we'll be in a very much different world

We're talking about violent upheavals worldwide, governments falling - I don't know if even our government could survive something as catastrophic as that.

[gravity]

21. It is a better time to get in than the past 5 years

There are many good stocks being sold off because of fear, so I would start buying for the long run.

[boomerbust]

22. No

But if I had any amount of cash I would buy Ford stock at $3.25 a share.

[earth mom]

24. Where's the HELL NO option?!

:argh:

[Marie26]

25. Already have.

I don't see McDonald's going out of business anytime soon. But don't listen to me, or other DU posters, or the talking heads. It's a risky market right now & there's a good chance of betting wrong. You've got to follow your own best judgment.

[slackmaster]

31. I am staying the course on dollar-cost averaging in my 401k

The load on my plan's S&P 500 index fund is minimal. I am currently putting in about $1,150 into it every month split between the S&P fund and a mix of others (international stocks, etc.), and intend to keep doing so unless my need for cash increases. My budget is very, very tight right now.

So far I have made no changes at all in response to the economic situation, other than spending less and keeping credit cards paid in full.

[IsItJustMe]

33. I don't think we are even close to the bottom yet. Wait a while would be my advice.

[kick-ass-bob]

35. The problem is

who will you buy?

Right now you can't tell who is going to tank and who is going to recover without some major research.

We're also not at the low point yet, so if you have an automatic $ amount purchase every month in a Mutual Fund, keep doing it.

If you have $50K burning a hole in your pocket, I would let it sit in that pocket for a while longer.