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tony

When Will The Bull Return ?

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Tony,

Here is another article that compliments your post:

 

"Every time the market pros tell us to stay calm, I get very nervous." The author wrote.

 

This is precisely why I listen only for ENTERTAINMENT what the WSJ or Barron's ever write. Their articles are absolutely useless for individual investors.

 

This is why:

The author continues: "One thing that encourages me to panic is the steady cascade of admonitions from luminaries urging me not to panic. Last week, professional cheerleader and Wharton School professor Jeremy J. Siegel wrote an Op-Ed article in the Wall Street Journal arguing that stocks are significantly undervalued because the S&P calculates its earnings incorrectly. I couldn't understand all of his reasoning, but basically he said that stocks were cheap. The next day, Jason Zweig, author of the Journal's "The Intelligent Investor" column, fired back: "The belief that stocks become virtually riskless if you just hold them long enough -- popularized a decade ago in books like Jeremy Siegel's 'Stocks for the Long Run' and James Glassman and Kevin Hassett's 'Dow 36,000' -- has been shattered by reality." Hassett, by the way, was one of John McCain's top advisors. Talk about dodging a bullet.

 

The lower the Dow goes, the more adamantly some professionals insist that the worst is over. In this week's Barron's, portfolio manager William D'Alonzo said: "Whether it takes six months or several years for this crisis to bottom, we believe the market has largely discounted the economic downturns, and that it is essential to remain in the market to take part in its eventual recovery." No thanks; I'm panicking. "

 

The author made a common mistake, he did not have a plan that included his understanding of how risky the market is (more than risk tolerance). Instead, he is panicking and its not a good way to deal with a market that is going down and down (I don't think its very funny either). A better way is to carefully set up a plan that will handle both bull and bear markets. During bull markets you settle for the averages, increasing one's bond holding as you get older, and be frugal during both bull and bear markets. For example, it is terrible to have a huge credit card debt during a bull market and disaster going into a bear market.

 

Just some commone sense musings,

Steve

 

complete article here:

http://www.latimes.com/news/opinion/commen...0,7460956.story

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