Thursday, May 20, 2010

The Stock Market

It is definitely not a time for faint of heart investors worldwide. I tend to be in the same philosophy with many long term investors which is: "Invest for the long term in blue chip stocks and then get ready for a long ride through all the ups and downs." The problem is when people can't afford to actually stay invested through all the ups and downs  and then they panic and sell at the wrong time. Unless you can stay invested long term these days maybe it isn't the right time to be invested in Stocks. Basically, when you are a long term investor, generally what you are saying by this is: "I believe the stock market in my country generally will head up over the years." If you don't believe that then why are you a long term investor at all? I think this is the question all of us need to keep asking ourselves. And my answer is: "If the U.S. stock market isn't going to head up over the years the whole world is in trouble. Because China has too many long term troubles to work out in regard to the 1/2 to 2/3 of its people who are poor and their stock markets are not properly set up for the long run. So sooner or later the Chinese Stock Market is bound to sputter or even crash until they put more checks and balances in place like we had here in the U.S. before the Reagan Administration.

Later: Here is a quote that appears to be describing the European Union and the Euro which is spooking world investment markets these days.
 Begin quote.

"It's starting to look like one of these tragic stories were one person falls through the ice, then everyone else rushes in to help and ends up drowning," he added. end quote

If you want to read the full news article I got this from here it is:

Global jitters hammer stock market

However, I think all this is just the expected 10% correction to the stock market. Many have said the market was overpriced and should correct to around 10,000 or a little above that. So my view is this is just a necessary correction. So even if people spook it to even 9000 I think it will soon return to above 10,000 within a few weeks or month unless there is some other news that hasn't arrived yet.



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