Comments on: Did the 1000 point intraday drop affect you?

By: Apartment Investing offers a shelter from volatility

Apartment Investing offers a shelter from volatility — Fri, 19 Aug 2011 13:02:33 +0000

[...] this market volatility is nothing new, but it has gotten to the point that market observers need to take Dramamine before the bell rings. [...]

By: Apartment Investing offers a shelter from volatility

Apartment Investing offers a shelter from volatility — Tue, 16 Aug 2011 01:26:24 +0000

[...] is probably not the first choice for many investors.Motion SicknessSadly, this market volatility is nothing new, but it has gotten to the point that market observers need to take Dramamine before the bell rings. [...]

By: A.J. Reese

A.J. Reese — Wed, 12 May 2010 20:46:04 +0000

I tell my co-workers the same thing. I could go on for a long time, but I will limit it to 3 points:
1) So you buy GE stock, do you know what they are doing on a day to day basis and what their plans are for the next 5 years? Most investors don’t even read the annual reports. So really it is just a gamble.
2) Very, very few stocks do not move with the market, so your really investing in investor emotion.
3) Look up the percentage of 401k accounts that actually make it to retirement age. I have seen quotes that 90% are withdrawn early at a 10% penalty, though I admittedly cannot find a reliable statistic on this number.

The 1000 point drop did not affect me at all, I own rentals.

By: Rick

Rick — Sun, 09 May 2010 13:48:35 +0000

I agree with that. Real Estate does have its ups and downs as well. As I see it though, it’s much more predictable and far less subject to the whims of public folly.

Detroit, as Kathy mentioned above, is a perfect example. Yes, Detroit has declined in value dramatically over the past 40 years, but the reasons have been slow moving and clear for everyone to see. One metric: The population has dropped from 2 million down to around 800K. That’s left a tremendous imbalance between the supply of houses and the demand for them. The same is true of commercial property in that city as well.

Compare that obvious, predictable and slow moving trend with something like Enron’s week long plunge into oblivion and I think most people would agree; there are a lot of unknowable factors deciding the stock investor’s fate.

Clearly, investing in Real Estate is not risk free. That’s why you either invest in your own backyard on your own (within 30 minutes of your home) or you engage the support of experts who know the more distant area you choose like the back of their hand.

The way I see it, the odds of your own backyard being the best place in the whole country to invest … are slim.

By: Jeannie Llewellyn

Jeannie Llewellyn — Sun, 09 May 2010 04:58:33 +0000

Chad,
The 1,000 point drop was actually somewhat amusing… only because I felt the market, though I want it stable and growing, was growing a bit faster than I thought would be stable.

That said, I’ve learned my lesson about a decade ago – and my dad warned me against gambling – when I lost more than half of my portfolio during the crash in the 80s, then in the 90s, and a little more post-Y2K. I’m a slow learner, I guess, and didn’t pull my portfolio money out in time. BIG lesson learned: no one else will watch your money better than you!

My financial planner took his 2% right upfront, and never looked back, while he played with my money and bought stocks that went against my money rules (over $50 / share), and tanked the next year.

As for real estate, I agree with Kathy, that it, too, has it’s ups and downs, but they aren’t as volatile as the stock market. I tell my clients that I worry about investing in someplace that measures it’s progress every 10-15 minutes as the stock market does. Residential RE markets react more along the lines with the stock market, though it has a lag period and may not be as up or down, even after a crash. Commercial RE markets have an even longer lag period and more dampened reaction in reflecting the stock market trends. So, eventually, all markets are affected, just in different ways and periods.

I feel the market drop and the fact it hasn’t recovered back to pre-drop just means there’s a correction factor even now – and a good wake up call to those investing blithely in the stock market.