Without being a market expert, or an economist, anything I say about this mess is just as an observer. But I do observe that there seems to be no “fundamentals” left in the market. All we get are a series of knee-jerk reactions to random news articles. A specific projection about a sector or specific company is given virtually no weight, only the broader market is of any concern.
I’m a giant fan of graphs, mostly because I love numbers, and graphs have a great way of expressing numbers in a simple visual way. Like this graph:
If you take a look at this fun graph, you can see we might just be at the very tip of the iceberg on how far the stock market can go down. Only time will tell, but a betting man might start to tke out some large shorts right about now.
Let's look a little deeper though. Electronic trading, average people in the market, hedge funds, mutual funds, international soverign funds, the Internet. The list of new entities in the market and new forces goes on and on. We could be in some new world financial market order. Of course the same forces that have always held sway might win the day and the market is in for one HELL of a correction.
When the market does this, I can't stress real investing enough. Don't invest in something that is just a piece of paper. Invest in something real, or something that will pay you, like a bond, prefered stock, or dividend paying common stock. You are still exposed to potential losses, but in the long-term you have very high chance of coming out ahead.
