Are you buying into financials?

[Workbox]

I think there is a high risk that the market could go sideways for a decade just like the depression.

Thats like a deer in the forest, always on the edge and never knowing what that rustling sound is.

 

[TJSum]

No one knows what is going to happen, if someone tells you they do, they are full of sh*t.

The only safe way to invest is to find a couple solid mutual funds or ETF's and dollar cost average them. It will automatically allow you to buy more when prices are down and less when prices are up. Even if the market stays flat for 10 years, with the ups and downs, you still will come out with a nice gain. The only way for this system to fail is if the entire economy and country collaspes, and if that happens, it will not matter where your money is, we all will be screwed anyway.

Now if you wish to gamble or speculate, instead of invest, that is a different story. Have at it, but keep in mind it is your throw away money that should go toward this, not investment funds. If you were to take that gamble, my thought would be to throw some money at a financial mutual fund, this way you don't have to guess which banks will prosper or fail, you would be betting on the entire sector, and my guess would be several years down the road the sector would be up greatly.

 

[OCApp]

What's funny is i took a flyer yesterday on a couple hundred DNDN at $7.35 about an hour before the close. it halted after hours and opened premarket this morning at $22 and sold it soon after.

talk about dumb luck lol.

 

[The Dog]

While I do some day trading (made a bundle on WAMUQ, C and FNMA), I really believe the time is now to invest for long term. The opportunity exists to buy companies at prices that are unheard of. I think anyone should right now spread out the risk by buying companies that stand a reasonable or more than reasonable chance of surviving this present set of circumstances.

My wife besides being a CPA is also a licensed stock broker. Some of the stocks we are buying now have no relationship with regular investing methodology. Some are bought purely on speculation that they will survive (ie F which has so far tripled and is the safest of the auto stocks available). There are a number of stocks out there that are extremely good investments.

But forget ratios etc. At the present time, some of the investments anyone should make is almost like gambling money. Spread the risk over a large number of stocks, hold them and check on them regularly.

We are buying companies whose products we would use, whose products my friends are using and whose stocks have been beaten badly, but you know you will use them in the future. There are good buys and I believe that this is a perfect time to buy both short and long term.

 

[Terrel L. Shields]

The only safe way to invest is to find a couple solid mutual funds or ETF's and dollar cost average them.

Mutuals haven't been so "solid" over the past - many have lost 50% in 2 years; and dollar averaging when prices are low makes no sense...how can penny stock go anywhere but up unless you only invest a few dollars? CNBC had some comments yesterday about dollar averaging being unimportant at these levels. And a few weeks ago were showing that many ETFs were not performing on par with the market.

At this point, I want to simply "know my company" and invest modestly in small and mid caps in industries I have experience in or develop experience with. I might dollar average additional money into the ones I already own. I also am looking at Canadian oil companies and service companies where they have recently been beaten down by recent lower prices and higher taxation. That will reverse.

Mutual funds have proven to be just as risky as the market and have riden down tit for tat with the stock market itself...something your hot shot stock broker probably told you wouldn't happen.

We are buying companies whose products we would use

solid advice. I found that I liked Office Max better than Office Depot after being an OD fan for years. After OD bought out Viking and I lost my paper provider of choice, I discovered Office Max to be better deal. Look how the stock has performed. Apparently others thought the same way I did. I like Casey General Stores when traveling in their area, and bought that stock on that metric. I worked with Anadarko Petroleum years ago and it has been my star recently.

 

[The Warrior Monk]

While I do some day trading (made a bundle on WAMUQ, C and FNMA), I really believe the time is now to invest for long term. The opportunity exists to buy companies at prices that are unheard of.

I tend to agree...EXCEPT...I am not convinced that the future stock price of some of the largest and most well known lenders won't be $0.

 

[Caligirl]

Pigs and the financials.

While all this might be true for the long run, as a day trader, what do you guys think of a quick dip, for a week or so, any potential there is some equity left to pull?

Some pigs are wearing lipstick, and others are just pigs. At the same time, pigs get fat, but hogs get slaughtered. :icon_lol:

Anyone's guess right now, now that the gob't got involved and gets to decide who fails and who gets bailed out.

 

[Eli Weiss]

The market is facing reality again....pulling back.

 

[TJSum]

The advantage to Mutual Funds is that you do not have to be exact on which companies will survive or fail. IMO there are many more companies that will fail before this is all over. It is much safer to bet on 100's of companies, or entire sectors, so that the few who fail will not sink you. I agree with Dog, ten years or so from now we will be looking back and kicking ourselves for not investing more, at least in the companies that survive. The mutual fund route takes away the danger of picking the wrong survivors.

I disagree with the notion that dollar cost averaging no longer works. In fact, it is the only way to "time" the market and be correct all of the time. The only way it will fail is if you are dollar cost averaging into a stock that goes under, this is why it needs to be put into a diverisified investment. No, it will not get you rich quick, but it will get you there. Of course the tv shows and magazines hate dollar cost averaging, it is not sexy enough and kills their ratings. No one is going to tune in or buy a magazine that touts that, they need to sell you the latest HOT TIP, and why most investors end up doing the wrong thing.

 

[Workbox]

It funny, I hear both camps about mutual funds, dollar cost averaging, buy metals, go cash, both the pros and the cons of which is better and which is not. It just goes to show what my Econ Teacher told us, "They are all full of it" and not one is better than the other. Even the pros are having to swim through the left over carnage to figure out which still have a pulse and if it is worth to revive. YOU have to do your homework. Everyone has a comfort risk level and evaluate their our success and profit in many different levels.

In these days in times you have to be able to evaluate every stock as though you were appraising a house. But this is a different kind of market now, very sophisticated on split second decisions. You have to take into consideration the economic/political/business/rules/laws/society reactions/deaths/births of new enterprises, you have to assimilate so much to figure out what is your comfort area. Some stick to what they know and others are just wading through the thick of and figuring out what sticks. Some are fundamentalist, others use charts, some go with their gut from years of experience with little number crunching, while others are developing algorithms for their formulas. And Still, you have the scrap metal guy who may be a multi millionaire and never know it.