Today's Stock Market

[marlasmom]

Dow JOnes down 287 points, NASDAQ down 87 points. Do you think there will be a quick recovery? Or - do you think it will go down even more?

 

[NewJersey]

I think there is going to be a slight sell-off but nothing major; lead by Greenspan's concerns about a possible recession, the recent increase in the price of oil, and worries over China's economy and the sell off there.

Earnings season is coming up in about a month (Goldman Sach's Q1 end was this past Friday - their quarter/year-ends are a month earlier than most companies b/c they operate on a November-end fiscal year) so earnings from them will be coming out 2 weeks from now. I'm curious to see the Q1 earnings from alot of these companies, especially Goldman Sachs. I don't think earnings will be as robust as they have been as of late.

 

[Carl]

Oh, YES. I just let my bank talk me into putting half my savings into the stock market, so YES of course the bottom will fall out again.

 

[marlasmom]

A broker once told me - "so long as you're getting your dividends, what do you care about what happens to the price of the stock?" What do you think about that?

 

[Laz]

Many analysts have been waiting for a correction. It just needed a trigger. If you are focused on the long run, it would be a great time to get some bargins!

 

[Jimbo]

A broker once told me - "so long as you're getting your dividends, what do you care about what happens to the price of the stock?" What do you think about that?

As a whole, the stock markey yields about 1.5% in dividends. It used to be higher, and some stocks do yield a lot more (real estate, banks). But a whole lot of stocks don't pay any dividends at all (tech stocks, for example).

Because of that, the price DOES matter. And the price is based on market sentiment, so when people get worried prices goes down, when they get exuberant the price goes up. It's why you have to be in it for the long haul, because things generally revert to their long term averages.

That's why retirees, or people nearing retirement (like me ) need to reduce the percentage of their money in stocks. They'll likely be drawing on it in the short term.