Stock Market Worries
Annegriet
4 years ago
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More stock market correction expected
Comments (4)It's been a long bull market, but interestingly enough, the total value has only risen 75% over the 10-month period. One of the lowest valuation increases of the 6 big bull markets in NYSE history, in fact. I do expect less profit out of the market this year, as corp profits are slowing and the Fed continues to maneuver towards that "soft landing". But overall, fundamentals ain't that bad, although the usual media hysteria has the average folk rattled. Can't be sure of anything, of course, but that's part of the risk of life, these days. Moderating risk is the best one can do, otherwise we'd never be brave enough to get out of bed in the morning! A large proportion of our current allocation is overseas, I will cut that back at the end of 2Q07. Time to take that 25% profit from 2006 and get into the next sector. We were lucky on that one, but I'm aiming for our normal return, more in 9-11% range this year. IF, of course, I'm guessing right, LOL....See MoreDo svgs int rates, stock market change house financing?
Comments (3)There's usually major volatility around the market as it works through the bottom, so it would often be well to be making ongoing commitments periodically as one felt that the bottom was being developed. Not getting bent out of shape as the values went down again, figuring that, after while, there'd be recovery in quality companies, and the more commitments that one had made on a regular basis through a prolonged bottom, the larger would be the amount eligible for increased value as the market moved ahead again. But I'm not expecting a major move ahead soon, as I think that our difficulties are much deeper than in earlier recessions. If I'd suggested to you, five years ago, that there might be a possibility, in a few years, of GM being at risk of going bankrupt ... you'd have laughed me out of town! And it seems to me that a number of our problems aren't just cyclical ... they're structural: many of these disappearing jobs aren't going to reappear later ... at least, not in our portion of the global economy. Although several here disagree with me, my feeling is that I'd like to get the debt on the house paid off - to be out of debt. But I'd want to have a substantial cushion available in case of emergency, especially in these times of major economic uncertainty, with so many layoffs taking place. Having lived in 22 locations during my 80 years, I've never owned a home, so never had a mortgage. That said - I frequently lack that emergency fund, myself, of 3 - 6 - 9 months' or a year's income in case of major immediate emergency. But I have a credit card, which I almost always pay off in full prior to due date, and a Line of Credit at the bank, fully secured by stocks and mutual funds, which I can draw on to pay off that emergency loan that I'd put on the card. The Line of Credit bore no initiation fee, and there's none for inactivity, either. Would your lender be willing to offer you a Line of Credit, using stock or mutual funds' certificates (could be part of your emergency fund, if you know for sure that your lender will give you an LoC) along with using the equity in your house, while you still had a substantial amount owing on your mortgage? I don't like to borrow for consumption purposes, but I may borrow to invest in quality assets (whatever they may be!), as I have something of ongoing value to show to offset the loan that I owe. If I do borrow for consumption, I want that on a different LoC, as interest on investment loans is deductible ... that for consumption purposes usually is not. Good wishes for making a decision which will please you on an ongoing basis as you choose which path to follow. ole joyful...See MoreWring your hands over the stock market here.
Comments (15)When I heard/read about the &%$#!@'s like AIG top dogs I think it's time to give serious thought to holding old fashioned Public Hangings! To see this story with its related links on the guardian.co.uk site, go to http://www.guardian.co.uk/business/2008/oct/07/creditcrunch.useconomy Executives at bailed-out AIG stayed at $500 a night Californian resort A week earlier the Federal Reserve had to extend a huge credit line to AIG to keep the troubled firm from collapsing Andrew Clark in New York Tuesday October 7 2008 guardian.co.uk The world's largest insurance company, AIG, spent $440,000 (?250,000) on a lavish corporate retreat at one of California's top beachside resorts just a week after accepting an $85bn emergency loan from the US government to stave off bankruptcy. Details of the getaway emerged at a congressional hearing today where lawmakers expressed outrage at AIG executives "wining and dining" at the height of a financial crisis. An invoice from the St Regis resort in Monarch Beach, south of Los Angeles, shows that AIG spent $139,375 on rooms, $147,301 on "banquets", $23,380 on spa treatments and $6,939 on golf at an eight-day company event which began on September 22. A week earlier, on September 17, the Federal Reserve had to extend a huge credit line to AIG to keep the troubled firm from collapsing due to vast liabilities on risky financial insurance policies. "Average Americans are suffering economically," said Henry Waxman, chairman of the House oversight committee. "They are losing their jobs, their homes and their health insurance. Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation." Set in 172 acres of grounds on a bluff overlooking the Pacific ocean, the St Regis resort describes itself as "Tuscan inspired". Rates for its 325 rooms are typically upwards of $500 a night and the travel guide Fodor's gives the place a rave review, saying: "Exclusivity and indulgence carry the day here; you can even have someone unpack for you." An AIG spokesman said the event was to entertain independent insurance salesmen of AIG American General - one of the company's main US operations which offers life, health and accident policies. "It was a recognition event for independent agents of AIG American General who distribute insurance policies," said the spokesman. "It was planned months ago." In written evidence to Congress, AIG's former chief executive, Robert Willumstad, blamed an "unexpected and unprecedented market-wide crisis of confidence" for the company's financial predicament. AIG wrote off more than $50bn in unrealised losses on complex mortgage-related instruments such as credit default swaps. But Willumstad, who stood down as a condition of the federal bail-out, blamed mark-to-market accounting rules for accentuating the impact of the company's exposure, prompting downgrades by credit rating agencies. "Looking back at my time as CEO, I don't believe AIG could have done anything differently," said Willumstad. "The market seizure was an unprecedented global catastrophe." Copyright Guardian Newspapers Limited 2008...See MoreNew Stock Market Terms
Comments (5)FINANCIAL PLANNER -- A guy whose phone has been disconnected. Think lots of financial planners are wanting to do this!...See MoreAnnegriet
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