Invest in Stock Market During Market Drop - Tips & Advice

[russ_watters]

Well, the value of a company is based largely on their assets, their ability to make money, and their debt. A company like GM might have a lot of assets, but their ability to make money is not very good right now and their debt is sky high. That equates to low stock value.

 

[Moonbear]

I just think that if you're riding on the stock market right now, you better take some anti-nausea medication...it's one BUMPY roller coaster!

My boyfriend has been in Japan for the past week, and that's the big question everyone there is asking, how is the economy in the US? He said he draws a series of up and down arrows and says, "Today, Tomorrow, the next day, etc." then tells them, "If you want to know how it'll look next week, turn the drawing over." (I don't know if he really did this or was exaggerating his story for humor value, but I thought it was a pretty good summary.)

 

[misgfool]

Only question here is that, what is the direction of the real economy. Stock prices are low at the moment. But in a few years scope buying any relatively large company with P/E < 10 is a good guess.

 

[OmCheeto]

I heard that the market value of the dinky toy-car manufacturer Mattel is now greater than that of General Motors.

And buying bankruptcy protection is cheaper on McDonalds than the US govt.

Some strange dislocations out there.

Hard to believe. But it's true.

10/31/2008
Mattel: Mkt Cap: $5.38 billion, up 7.9%
GM: Mkt Cap: $3.28 billion, down 4.6%

Maybe Mattel should buy GM.

After all, they've been stealing detroits design ideas for years. They might as well own them.

 

[Vanadium 50]

I'm going to take a contrary position here.

First, you have to decide if you are gambling or investing. The strategies are different. Nothing wrong with gambling - the problem is when you are gambling and think you are investing.

Second, your question should not be "which stocks do I buy?" It should be "how much do I have to invest every month, and what fraction of that should be in stocks". If you can't afford to invest every month, I suspect that the right investment is a savings account. If you need the money soon (some say 5 years, I would say 10), I would not put it in stocks.

Third, it doesn't matter if you buy stock when it's moving up or down. All that matters is the price when you buy it and the price where you sell it. Good thing too - analysts make good money trying to figure out the top and the bottom of the market, and frankly, they aren't very successful. Amateurs like you and me would be expected to do worse than professionals.

Finally, I am a big fan of index funds. They have lower fees than managed funds, and you're automatically diversified and have less volatility than individual stocks. The central limit theorem is a beautiful thing.

 

[Evo]

Cronxeh, please refrain from posting actual companies to invest in.

 

[cronxeh]

Well that is odd. I thought we were talking stock picks. What do stocks have to do with companies? Besides the ETFs I posted are not company stocks they are a basket of company stocks. Anyway seems pointless