Not Tax Related

[Pacun]

It is my understanding that the house market it causing NYSE to go down. Since there are enough houses in the market for 4 years of demand, do you think that NYSE will not recorver until 4 years later? Anyone with a crystal who can predit the future? Do you really think the house market is the one causing this or it is just a cyclical downfall?

[jainen]

>>Do you really think the house market is the one causing this<<

It is very complicated. The demand for housing is as high as ever, but the credit markets are all messed up. The easy-qualifier mortgages of the past five years were used to back various mutual funds and other securities. They turned out to be poor performers, which is more history than predicting. Now those securities have less value, which has created a "liquidity" problem for the entire market world-wide.

At the same time, the U.S dollar, which has been the world's reserve currency, has been devalued because the U.S. has borrowed heavily from foreign countries. And the worst part of all is that the Federal Reserve (which is neither federal nor a reserve of anything) continues to make "money" that is not backed by anything at all, not even a promise to pay. In the last week the financial markets have been "rescued" by an extra $50 billion dollars. Where did that come from? No where. They just pretended it was there.

[mcb39]

Everyone is blaming the housing market and I am not qualified to answer your question. I just know that my "best" stock just came in with its 10th straight quarter of record earnings and is still paying dividends; yet the stock price has plummeted $$$$$$. The past couple of days have shown some improvement. I have never felt that I could count on money that I have in the stock market. I manage my own account and buy and sell as I see fit; but also have safe investments in conventional IRA accounts. My advice is Hold.

[bigdadder]

Going back over the years (---1960---) there have always been good times and bad times.

My experience has been that it pays to be an owner(stocks & real estate) and not a loaner(bonds, cd's, and money markets.) No one knows the future but history does give us a clue.

[taxxcpa]

Going back over the years (---1960---) there have always been good times and bad times.

My experience has been that it pays to be an owner(stocks & real estate) and not a loaner(bonds, cd's, and money markets.) No one knows the future but history does give us a clue.

The stock market always goes from bull market to bear market. The longer the bull market lasts, the nearer we are to a bear market. We have had a fairly long bull market this time and a bear market is lurking somewhere, maybe right away, maybe later. I've unloaded most of my stock-related investments before the plunge arrives. I'm stuck with some real estate I can't sell and will be out about $10,000 per year in taxes if it stays on the market for a year or two. I will invest in an "ultra short" real estate ETF as a hedge. The day before the Friday rally, this ETF was up about 8% in a single day. Most of that gain was wiped out by the Friday Fed rate-cut rally.

For most people I think the best strategy is to sell all stocks and go into the money market or short-term CDs.

[joanmcq]

Trying to time the market is the worst strategy you can use. Sure some of my funds lost value in 2000. and I held on and they bounced back. I have a balanced portfolio (indeed most planner would say I have too much in cash, ie CDs for my age and investment horizon) and am not worried. if you use dollar cost averaging, as most 401ks contributions are, you just buy more shares when they're down. Pacun, are you trying to retire tomorrow? is your entire portfolio in one market segment? If not, then quit worrying. if you are that market risk adversive, you shouldn't be in the market at all.