STOCKS STILL THE BEST INVESTMENTS?
August 5th 2008 00:00
I checked the Mclelland Oscillator of the Philippine Stock Exchange this morning and noticed something that surprised me. It has been a year since the markets first started to take a nose dive. A year! Well, experts are saying that bad economic conditions could last for two years, maybe even a bit longer.
The idea that it can last that long is not the surprise, really. The surprise is that it has already been a year, for this round, give or take a few days! What that means is that the money that has been languishing in my stock market accounts has not been making any additional money, if not continuously losing its value, at least in paper.
I felt the anguish, the grief, the sorrow of losing money... well, okay, I'm exaggerating here... it's a bummer, I lost money, but it didn't feel that bad really. Maybe it is because of my ignorance, my stupidity, my own set of expectations - or just simply because of the fact that I am in this thing for the long haul... but I still pretty much believe in investing.
And that is how the question came about. Are stocks still the best investments? Well, since I am a market newbie, and that is a nom de guerre that is not likely to change for as long as I maintain this blog, and it doesn’t sound (nor do I presume to be ) anywhere near an expert, let us allow someone else to answer that question.
Please follow this link to a similar topic that I found while browsing the net: Really Long Link
Basically, it says that stocks are still the best investments, depending on your investing horizon.
And it doesn’t matter whether you’ve seen a glimmer of a profit, or not, the past year.
The idea that it can last that long is not the surprise, really. The surprise is that it has already been a year, for this round, give or take a few days! What that means is that the money that has been languishing in my stock market accounts has not been making any additional money, if not continuously losing its value, at least in paper.
I felt the anguish, the grief, the sorrow of losing money... well, okay, I'm exaggerating here... it's a bummer, I lost money, but it didn't feel that bad really. Maybe it is because of my ignorance, my stupidity, my own set of expectations - or just simply because of the fact that I am in this thing for the long haul... but I still pretty much believe in investing.
And that is how the question came about. Are stocks still the best investments? Well, since I am a market newbie, and that is a nom de guerre that is not likely to change for as long as I maintain this blog, and it doesn’t sound (nor do I presume to be ) anywhere near an expert, let us allow someone else to answer that question.
Please follow this link to a similar topic that I found while browsing the net: Really Long Link
Basically, it says that stocks are still the best investments, depending on your investing horizon.
Isn't that a nice bunch? Pic source: Wikipedia
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Comment by Anonymous
The famously successful investor Warren Buffet says. When you see greed in the market ( going ever up) sell and when you see fear ( going ever down ) buy. Of course it's easier for investors with long experience of the up's and down's to take this view than a market newbie who has only seen losses in his or her portfolio.
Market's are like all earthly phenomena cyclical. We're in a semi global recession with high commodity inflation right now and falling house prices in the US and Europe, with even HSBC bank given its high exposure to Asia reporting a drop by a 1/3 in profits yesterday. These are all reasons for stock markets to fall!
In 5 years time though buying stocks today will look like a good decision, though to those who bought late last year it won't look quite so good. The key then looking back is to have bought in 2003 and sold in 2007. This fits exactly with the economic cycle and Warren buffet's advice. When he sold his Petrochina shares last Autumn I sold my China shares and they're well down today. He didn't get it exactly right as they went up further before falling, but he wasn't greedy and followed his own advice.
So those of you sitting on big portfolio losses must grin and bear it for it is too late to sell now. In a few years time stocks in all likelihood ( you can't plan for a 9/11) will be much higher and of those us invested today a high number will be more than satisfied with their results.
Comment by Market Newbie
Stock Market Punk
I agree with you. And you are right about newbies who only look at their own portfolios in determining the overall market movements. Some are lucky though to have access (for a fee) on historical data going back several decades. And I suppose that is one way of calming down those "tummy butterflies" (taking a longer view of the market).
I did sell some of my positions in November last year for a nice profit. I still remain invested, grinning and bearing every negative turn of economic events, though remaining positive.
But it is always nice to hear the observations and sage advice of someone who has more wisdom and experience.
Thanks for the comment.
Comment by Anonymous
Comment by TimmyH
Tech News
Can you HACK it?
Genyration
Comment by Fobzy
Fobz
Good to see your tenacity, my sticky little friend.
Comment by Market Newbie
Stock Market Punk
Land is good. And you are right, God isn't making any of it anymore.
Thanks for going this way again.
Hey there, Fobzy! Well, none of those stock market billionaires made their billions in just a day, so I thought I better mark my horizons too.
Besides, I'm not familiar with breeding horses.
Comment by Fobzy
Fobz
Comment by British bulldog
For those of you that did make 3.5% in the PSE yesterday while higher interest rates are forcing land prices down as demand for housing loans disappears,. good luck today. A further fall in the oil price and modest rise in the Dow last night promise further more modest gains today. The PSE is now up around 10% in recent weeks, unlike most pieces of land.
There is nothing wrong with a balanced portfolio of investments and land has it's place, but not at a time of rsiing interest rates and global falls in house prices. As commodities pull back on falling global growth the scene is set for a stock market rebound looking at economic recovery next year.
Anyone surveying the landscape of where they can make money must look at the potential 20% they can make in the next 6 months in the PSE. It compares favourably with anything other than being a loan 'shark' proscribed as being anti christian for centuries!
So guys and galls start dribbling money into the PSE today and it wiill look very good in 12 months 24 months 36 months 48 months and 60 months.
Regards to you all,
British Bulldog