More change we can believe in

[AUTailgatingRules]

Hide your money, wall street reacts to the tax cheat's statements.

http://www.ft.com/cms/s/0/1a2106a6-f773-11dd-81f7-000077b07658.html

[Tarheel]

Hide your money, wall street reacts to the tax cheat's statements.

http://www.ft.com/cms/s/0/1a2106a6-f773-11dd-81f7-000077b07658.html

Very good article.  I did not know that there was something called The Vix which tracks Wall Street's Fear Factor (see below).  That index will be particularly interesting to review each time Geithner (or The ONE) speaks since the market is driven by fear and greed; it seems that fear is in ascension.

...The Vix, known as Wall Street’s fear gauge, leapt 6.9 per cent to 46.7....

I'm not sure that this fear-mongering from The ONE and his orcs is not by design anyway in order to forward their obviously socialist agenda.

Here are some brief thoughts that I posted yesterday on this issue:
***Edit: guess that it would help to actually post something here***

Sen. Shelby is absolutely right and I got my answer today as to what the free market thinks of this boondoggle of a plan...closing down 381.00 points!

Right now I'm 90 percent cash...the Democrats socialists want us all working for FedGov; and what they are doing is nothing short of bringing down our free market system; it's not worth investing in right now because every time these fools speak about a new "plan" everything tanks.

All we taxpayers are going to be on-the-hook for trillions of dollars by the time you add the "Stimulus" to the "Financial Rescue (TARP)" package along with the Federal Reserve lending.

Here's the thread; the article posted here is well worth reading if you haven't already:

http://tigersx.net/forum/index.php?topic=4779.0



 

[Godfather]

Very good article.  I did not know that there was something called The Vix which tracks Wall Street's Fear Factor (see below).  That index will be particularly interesting to review each time Geithner (or The ONE) speaks since the market is driven by fear and greed; it seems that fear is in ascension.

I'm not sure that this fear-mongering from The ONE and his orcs is not by design anyway in order to forward their obviously socialist agenda.

Here are some brief thoughts that I posted yesterday on this issue:
***Edit: guess that it would help to actually post something here***


Here's the thread; the article posted here is well worth reading if you haven't already:

http://tigersx.net/forum/index.php?topic=4779.0
 

The VIX which basically stands for the volatility index, is a good gauge of the market.  It is the market's expectation of a 30-day volatility and is based off of index options. This volatility is meant to be forward looking and is calculated from both calls and puts.

There are three variations of volatility indexes: the VIX tracks the S&P 500, the VXN tracks the Nasdaq 100 and the VXD tracks the Dow Jones Industrial Average.

VIX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets.


What Does Volatility Mean?
Volatility refers to the amount of uncertainty or risk about the size of changes in a security's value. A higher volatility means that a security's value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security's value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.

[Thrilla]

The VIX which basically stands for the volatility index, is a good gauge of the market.  It is the market's expectation of a 30-day volatility and is based off of index options. This volatility is meant to be forward looking and is calculated from both calls and puts.

There are three variations of volatility indexes: the VIX tracks the S&P 500, the VXN tracks the Nasdaq 100 and the VXD tracks the Dow Jones Industrial Average.

VIX values greater than 30 are generally associated with a large amount of volatility as a result of investor fear or uncertainty, while values below 20 generally correspond to less stressful, even complacent, times in the markets.


What Does Volatility Mean?
Volatility refers to the amount of uncertainty or risk about the size of changes in a security's value. A higher volatility means that a security's value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security's value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.

So, does your personal opinion reflect the need to move assets into money market/cash options (ie Tarheel's statement of being 90% cash)?  I still have investments in high risk/long term mutual funds/stocks but I'm getting very antsy despite the steadfast advice I constantly hear to wait it out.  Is it time to redistribute said funds into lower or reasonably priced mutual fund options or into money market options? The more that time goes by, and the more action I see our gub'ment take, the more scared I become.  My portfolio is diversified amongst American and European investments, and is about 70 percent high/medium risk long term mutual fund investments/stocks with 30% being invested in more stable money market accounts.  Anyone's input and personal experiences will be appreciated.  I've already lost a shitload of money, but it's about balanced out with the amount of money it made before the bottom fell out.  The account is about 7 years old, and I'm about to be 30. 

[Godfather]

So, does your personal opinion reflect the need to move assets into money market/cash options (ie Tarheel's statement of being 90% cash)?  I still have investments in high risk/long term mutual funds/stocks but I'm getting very antsy despite the steadfast advice I constantly hear to wait it out.  Is it time to redistribute said funds into lower or reasonably priced mutual fund options or into money market options? The more that time goes by, and the more action I see our gub'ment take, the more scared I become.  My portfolio is diversified amongst American and European investments, and is about 70 percent high/medium risk long term mutual fund investments/stocks with 30% being invested in more stable money market accounts.  Anyone's input and personal experiences will be appreciated.  I've already lost a shitload of money, but it's about balanced out with the amount of money it made before the bottom fell out.  The account is about 7 years old, and I'm about to be 30. 

My opinion is that the market is bouncing on the bottom (further indication today as we hit 7600 and bounced back) we will continue to do that.  I think that for the next 16 months or so you will see the market rally and then drop rally then drop etc...until finally it will start to pick up some steam.

A couple of schools of thought...in your situation I would not pull out of the market and go into MM. We are past that point. You are young the market will rebound, if you can afford too the best thing for you (IMO) is to put more money into the market. Now I say that not knowing your current money situation, so obviously only dump money in if you can afford too. 

The theory is called dollar cost averaging, the principle is simple, if you buy a stock at $50 a share, and said stock drops to $30 dollars a share and you now buy one additional share you now own 2 shares of stock for $80 ($50+$30=$80). However what is important about this is that you have just dropped your cost basis, so when you owned 1 share of stock at $50 and it dropped to $30 a share you were down $20 or roughly 66% however after buying the second share you have now lowered your cost basis to $40 (2 shares divided by $80) so now you are down $10 or 25% and when the stock rises up to $90 dollars you make more of a profit as well.  

If you were to pull out of the market and go into cash, your next thought would be? When to get back in? Most people deal with investments with emotion. In other words buy high and sell low....not what you want to be doing.  So when the market creeps back up your thoughts would typically be should I get back in...no I'll wait. Now say the market goes to 10,000 well guess what you just missed out on 2000 points of that market upswing.

If you are concerned about your investments an alternative is looking at the investments themselves see how they have performed, how have they performed in previous historcal downturns?  How long has the manager been there?  Rather than selling and going into the Money Market maybe make a switch in funds, not something less risky like fixed income, but switching equity for equity.

Then again ...what do I know

[Tarheel]

My opinion is that the market is bouncing on the bottom (further indication today as we hit 7600 and bounced back) we will continue to do that.  I think that for the next 16 months or so you will see the market rally and then drop rally then drop etc...until finally it will start to pick up some steam.

A couple of schools of thought...in your situation I would not pull out of the market and go into MM. We are past that point. You are young the market will rebound, if you can afford too the best thing for you (IMO) is to put more money into the market. Now I say that not knowing your current money situation, so obviously only dump money in if you can afford too. 

The theory is called dollar cost averaging, the principle is simple, if you buy a stock at $50 a share, and said stock drops to $30 dollars a share and you now buy one additional share you now own 2 shares of stock for $80 ($50+$30=$80). However what is important about this is that you have just dropped your cost basis, so when you owned 1 share of stock at $50 and it dropped to $30 a share you were down $20 or roughly 66% however after buying the second share you have now lowered your cost basis to $40 (2 shares divided by $80) so now you are down $10 or 25% and when the stock rises up to $90 dollars you make more of a profit as well.  

If you were to pull out of the market and go into cash, your next thought would be? When to get back in? Most people deal with investments with emotion. In other words buy high and sell low....not what you want to be doing.  So when the market creeps back up your thoughts would typically be should I get back in...no I'll wait. Now say the market goes to 10,000 well guess what you just missed out on 2000 points of that market upswing.

If you are concerned about your investments an alternative is looking at the investments themselves see how they have performed, how have they performed in previous historcal downturns?  How long has the manager been there?  Rather than selling and going into the Money Market maybe make a switch in funds, not something less risky like fixed income, but switching equity for equity.

Then again ...what do I know

Great analysis and good advice of course; I don't think we've seen the bottom yet which is why I am limiting my exposure to this shitty market; especially with this Stimulus Bill winding thru Congress, followed by the second half of TARP, and whatever else the damn Democrats socialists decide they want to spend our money on.  I thought that things might stabilize after the election but there seems to be a lot of instability and fear out there.  It will come back eventually but there's a lot of anxiety there and a lot of fucking morons in Washington with an agenda.

I don't trust anything these fucking socialists are doing; makes me wish that I'd bought more gold.

Sorry I sound so pessimistic.

[Thrilla]

My opinion is that the market is bouncing on the bottom (further indication today as we hit 7600 and bounced back) we will continue to do that.  I think that for the next 16 months or so you will see the market rally and then drop rally then drop etc...until finally it will start to pick up some steam.

A couple of schools of thought...in your situation I would not pull out of the market and go into MM. We are past that point. You are young the market will rebound, if you can afford too the best thing for you (IMO) is to put more money into the market. Now I say that not knowing your current money situation, so obviously only dump money in if you can afford too. 

The theory is called dollar cost averaging, the principle is simple, if you buy a stock at $50 a share, and said stock drops to $30 dollars a share and you now buy one additional share you now own 2 shares of stock for $80 ($50+$30=$80). However what is important about this is that you have just dropped your cost basis, so when you owned 1 share of stock at $50 and it dropped to $30 a share you were down $20 or roughly 66% however after buying the second share you have now lowered your cost basis to $40 (2 shares divided by $80) so now you are down $10 or 25% and when the stock rises up to $90 dollars you make more of a profit as well.  

If you were to pull out of the market and go into cash, your next thought would be? When to get back in? Most people deal with investments with emotion. In other words buy high and sell low....not what you want to be doing.  So when the market creeps back up your thoughts would typically be should I get back in...no I'll wait. Now say the market goes to 10,000 well guess what you just missed out on 2000 points of that market upswing.

If you are concerned about your investments an alternative is looking at the investments themselves see how they have performed, how have they performed in previous historcal downturns?  How long has the manager been there?  Rather than selling and going into the Money Market maybe make a switch in funds, not something less risky like fixed income, but switching equity for equity.

Then again ...what do I know

Excellent advice and thank you for taking the time to type it up.  I think at the core this is where I was leaning (what your advice is saying), as I know I have time on my side and the simple principle of compounding interest will keep me invested mostly in mutual funds.  I do need to do some additional research on the actual funds, but I can tell you that they historically receive great long term reviews (for instance, one is the Growth Fund of America from American Funds) so I'm not sure how much switching around I'll do.

[Tarheel]

The VIX
...

Meant to tell you thanks for 'splaining The VIX; I'd never heard of it before.

[Godfather]

Great analysis and good advice of course; I don't think we've seen the bottom yet which is why I am limiting my exposure to this shitty market; especially with this Stimulus Bill winding thru Congress, followed by the second half of TARP, and whatever else the damn Democrats socialists decide they want to spend our money on.  I thought that things might stabilize after the election but there seems to be a lot of instability and fear out there.  It will come back eventually but there's a lot of anxiety there and a lot of fucking morons in Washington with an agenda.

I don't trust anything these fucking socialists are doing; makes me wish that I'd bought more gold.

Sorry I sound so pessimistic.

Well your old so your advice would be different. Seriously though everyones situation is different so your pessimisim is good for you.  Bottom line is I can give my clients all the advice in the world it's still their money.  Plus you pulled out I'm assuming a while ago so that is also a different situation.

[Tarheel]

Well your old so your advice would be different. Seriously though everyones situation is different so your pessimisim is good for you.  Bottom line is I can give my clients all the advice in the world it's still their money.  Plus you pulled out I'm assuming a while ago so that is also a different situation.

Yeah, I was very displeased with the way Smith-Barney was managing to loose my money for me every quarter and thinking it right to still charge me a hefty management fee...even buying me lunch on several occasions...probably with my own money...to explain why they were so clever. 

I figured that I could manage it better myself but in the meantime the market has been too volatile in my opinion...worse so lately.

Hell, at the rate the market goes down every time the new Treasury Secretary speaks we won't have a market to worry about by the end of the year.  I think Geithner is in WAY over his head while The ONE marches us all towards socialism.

And that gives me heartburn.