Taking a beating in the stock market

[QueenIsabella]

Exactly ! Sounds a lot like my wife and I. She worked, right out of college, for a company that sold company stock at a 15% discount, which meant that for every dollar you put in you could get a 15% return immediately. We lived in an apt, had debt, no money, but we did this as it was a "no brainer". I bought my first mutual fund (American Funds ICA) at age 12 and held it until I was in my 30's and used it as a down payment on a farm I bought. The middle class does indeed have a LOT of money tied up in stocks and the stock market.

I remember sitting down to do my employment paperwork that first time--I looked at the stuff on 401ks in disbelief. What do you mean, I can put this money in savings, pay no tax on it, and the company REWARDS me by adding another 50%?!? It sounded illegal to young, naive me! Who would turn down free money? I probably started with a simple mutual fund--it's been so long, I don't remember. But, I clearly remember being flabbergasted that this was a "thing". You could also purchase company stock at a discount, but there were other rules around that (don't remember the details), and a couple years after I started, they did away with that option.

Even now, DH and I are in a position where we don't need more retirement funds. But, we're still not passing up that company match!

 

[chicagoshannon]

Wow, the Nasdaq is at record highs. I never would have expected this. I would have expected it would have taken years to come back like it did 10 years ago.

It's because this was an artificially caused recession.

 

[Miffy]

I remember sitting down to do my employment paperwork that first time--I looked at the stuff on 401ks in disbelief. What do you mean, I can put this money in savings, pay no tax on it, and the company REWARDS me by adding another 50%?!? It sounded illegal to young, naive me! Who would turn down free money? I probably started with a simple mutual fund--it's been so long, I don't remember. But, I clearly remember being flabbergasted that this was a "thing". You could also purchase company stock at a discount, but there were other rules around that (don't remember the details), and a couple years after I started, they did away with that option.

Even now, DH and I are in a position where we don't need more retirement funds. But, we're still not passing up that company match!

You are so lucky to still have that company match. It was great to read that it still exists somewhere. Savor it!

 

[RivShore]

Just wanted to revive this thread with an update - the first post was on 2/27/2020 and the dow closed at 25,767, since then we have gone thru the northeast and other Covid hotspots and now the south hotspots, country wide shut downs, nearly 3M positive tests, 130k+ unfortunate deaths, plus protests, riots, oil turning negative and general world wide turmoil, and today the market closed at 25,812. I'm sure I missed a few (dozen) things, the resiliency of this market is just incredible .

Of course the fed and bailout dollars certainly helped...

 

[JoshF]

Still glad I loaded up on Disney stock when things hit the fan!

 

[georgina]

Just wanted to revive this thread with an update - the first post was on 2/27/2020 and the dow closed at 25,767, since then we have gone thru the northeast and other Covid hotspots and now the south hotspots, country wide shut downs, nearly 3M positive tests, 130k+ unfortunate deaths, plus protests, riots, oil turning negative and general world wide turmoil, and today the market closed at 25,812. I'm sure I missed a few (dozen) things, the resiliency of this market is just incredible .

Incredible is the right word. Things are nuts right now, looked like virus cases were getting under control and now going up fast. It is making me very uncomfortable. I had some things I wanted to sell before the end of the year, sold some last week & some today because they just look too risky now.

 

[Mom24Princesses]

Our portfolio isn’t huge by any means. Just a nice cushion for surprises. We inherited it and I Guess it is “diverse”. Overall we are less than 1% below where we were in January. Some increases (Microsoft) and some drops. Long haul - not quick money.

 

[RivShore]

The problem is the timing of your re-entry - how do you pick the bottom just right and if you miss it when do you re-enter? If it shoots back up over a couple days, you will feel like you missed the big sale and may end up sitting on the sidelines earning 0.7% on a stink'en 10 year t-bill, while the market continues up.



Yikes to this statement. No economist is right all the time but PK is not very good at predictions, here's a few...

In Nov-2016 he said the markets would never recover from the election results - the markets continued higher until the virus issues.
In 2017 he said we would never see 3% GDP again - 2017 & 18 saw +3% growth
He predicted a recession would have hit by 2020 - corona could make this one come true but without it, no way.
There's also this classic - "By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” Paul Krugman quote from 1998.
Heck, even he admitted he's not very good at predictions of recessions and markets “By the way, my track record for this is bad—as is everybody’s. No one is good at calling these turning points.”

Please don't base your investment strategy on these guys lame predictions!

Had to revive this old thred because i recently stumbled across this article describing another Krugman miss, this one was a big one - globalization...

https://getpocket.com/explore/item/economists-on-the-run?utm_source=pocket-newtab

 

[MillauFr]

Had to revive this old thred because i recently stumbled across this article describing another Krugman miss, this one was a big one - globalization...

Thanks for the article. One issue I have with it is that is concentrates too much on Krugman. It wasn't just him and it wasn't just one political party that was pushing globalization. Both major political parties and most economists on the left and the right were generally pushing for more free trade. There are some fringe elements on the right and the left pushing back but both of these groups are so wound up and more interested in spewing hyperbolic rhetoric than actually improving the conditions for middle class workers in manufacturing jobs. Hopefully more people inthe middle of the political spectrum become aware that the cards are stacked in Wall St.'s favor at the expense of Main St.

 

[Carol_]

I’m glad I got in before the crash/correction/recession/whatever it is and I stayed in. Some choices did great some are small losses but overall I’m up 15% in my individual account and down 4% in my retirement account... Since I plan on leaving that $ there for years I ignore it most of the time.

 

[RivShore]

Thanks for the article. One issue I have with it is that is concentrates too much on Krugman. It wasn't just him and it wasn't just one political party that was pushing globalization. Both major political parties and most economists on the left and the right were generally pushing for more free trade. There are some fringe elements on the right and the left pushing back but both of these groups are so wound up and more interested in spewing hyperbolic rhetoric than actually improving the conditions for middle class workers in manufacturing jobs. Hopefully more people inthe middle of the political spectrum become aware that the cards are stacked in Wall St.'s favor at the expense of Main St.

Agreed. And the most interesting part of what you said was the fact that some on the left and right have the same ideas about pushing back on the parts of globalization of have hurt the American worker...if only they could work together...

 

[RamblingMad]

Thanks for the article. One issue I have with it is that is concentrates too much on Krugman. It wasn't just him and it wasn't just one political party that was pushing globalization. Both major political parties and most economists on the left and the right were generally pushing for more free trade. There are some fringe elements on the right and the left pushing back but both of these groups are so wound up and more interested in spewing hyperbolic rhetoric than actually improving the conditions for middle class workers in manufacturing jobs. Hopefully more people inthe middle of the political spectrum become aware that the cards are stacked in Wall St.'s favor at the expense of Main St.

Most of Krugman’s articles are political in nature. But he does admit to making mistakes.

 

[MillauFr]

Wow.... Tesla surges above $1,700 a share in after market trading. It is now worth more than every other auto manufacturer on the planet combined. Simply bizarre for a company that makes a niche product. I thought people were crazy to pay $200 a share for a company led by a maniac. Boy was I wrong.

 

[Carol_]

I sold my biggest winner, and I’ll have to take 30% off for taxes but I think this is the beginning of a beautiful relationship between me and the market.