Today the stock market dropped another 7.33%, bringing the Dow to close at 8,579. For those who want to know how many points the Dow lost, in today’s trading is 678 points. Two days ago the DOW fell below 10,000 and nine trading days ago (Sept. 26th) it was at 11,143. In the last ten trading days the DOW has dropped 23%.
Most of the lost in today’s trading came in the last hour where traders try to cover margin calls. This market is definitely coming to the bottom. How far from the bottom could be anyone’s guess. According to Jim Cramer, he said about a week ago that the bottom is going to be around 8,350. I hope he’s right because I’m getting itchy to buy some great deals right no, but I’ll hold out just a little bit more.
Ironically, the Dow and the S&P 500 hit their all time high one year ago today. A decline of 40% in just 365 days. Like they say, “all good thing must come to an end”. I guess we can also say “this nightmare will be over soon”. What a difference a year makes.
Patience is a virtue and at this time we need to show quite a bit of it. A good investor needs to have this quality if you want to succeed. If you’re day trader, then this type of market is for you, not looking at the market as an investment vehicle, but as an opportunity to make money.
This is the perfect time for anyone looking to get into the stock market and won’t be needing any of the money for at least 5 years. If you’re sitting on a bundle of cash (that you might have recently removed from your bank) and wanted to know what to do with it, well then you might want to think about where the stock markets will be in 5-7 years. If history has shown us anything, it’s that after a correction like the one we’re experiencing right now, it’s that 5 -10 years later the markets have come back to be stronger than it was before (at least during that time period).