Wednesday, January 16, 2008
11,000
11,000. My wife and I were talking about the stock market recently. It
has become relatively unpredictable. Even a friend of ours who is a full
time investor is worried. Since its high of about 14,000 recently it
is now less than 90% of that or a 10%+ loss of value of the average
stock. My investor friend said that this is really hurting him
financially at this point. My wife and I are conservative investors even
though we know someone who lost 80% of their stock values in the 2001
crash after 9-11 because their investments were too aggressive.
However, even the conservative investors are worried. Especially with Countrywide having to be bought by Bank of America and Citigroup's subprime roller coaster. My wife said she thought that the stock market at 14,000 was overvalued and thought about 12,500 was appropriate. However, we both are thinking that we don't want to wait 5 years again like we did after 9-11 for our stocks to return to their pre 9-11 values.
It is definitely a time to already be invested in dividend bearing stocks for a variety of reasons. But it is approaching a time to convert to cash, safe money market funds or treasury bonds. We were thinking that 11,000 might be a time to convert to cash or other safer investments.
In a previous article I mentioned what I see as the three black holes of our now Globalized world economy.
1. Subprime Black hole
2. gas and oil pricing black hole
3. Global weather changes black hole
These three Black holes make it extremely difficult for the world economy to avoid a slowdown, recession or outright world depression reminiscent of the 1930's in the United States and Europe.
Predicting what will happen economically is likely close to impossible. However, preparing for the worst is how people who are the survivors have always found ways to go on through anything. Prepare for the worst and hope for the best. That's the pioneer spirit!
However, even the conservative investors are worried. Especially with Countrywide having to be bought by Bank of America and Citigroup's subprime roller coaster. My wife said she thought that the stock market at 14,000 was overvalued and thought about 12,500 was appropriate. However, we both are thinking that we don't want to wait 5 years again like we did after 9-11 for our stocks to return to their pre 9-11 values.
It is definitely a time to already be invested in dividend bearing stocks for a variety of reasons. But it is approaching a time to convert to cash, safe money market funds or treasury bonds. We were thinking that 11,000 might be a time to convert to cash or other safer investments.
In a previous article I mentioned what I see as the three black holes of our now Globalized world economy.
1. Subprime Black hole
2. gas and oil pricing black hole
3. Global weather changes black hole
These three Black holes make it extremely difficult for the world economy to avoid a slowdown, recession or outright world depression reminiscent of the 1930's in the United States and Europe.
Predicting what will happen economically is likely close to impossible. However, preparing for the worst is how people who are the survivors have always found ways to go on through anything. Prepare for the worst and hope for the best. That's the pioneer spirit!
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