Is the Bear upon us? - MutualFund411.com - Your Investing and Personal Finance Community

CAL · #1 01-25-2008, 10:57 PM

So obviously this first month of market year '08 has many folks running for cover. Some analysts say the US economy is headed into a recession and the bull market is over for now and some say it is just a short term condition, prompted by the subprime mortgage mess. I'm curious what you think about it. And BTW, does it really matter if we're headed for a recession? I personally look at it as a great time to buy instead of what a lot of folks are doing (cutting and running). History has shown that over the long term the stock market continues to climb (of course there are speed bumps along the way). I've got plenty of time left to recover and grow my investments until retirement so I'm not worried. It's times like these that I love DCA (Dollar Cost Averaging). If you have chosen your asset allocation wisely based on your risk tolerance, sure your portfolio may decline but in my view it'll all work out in the long run.

Zimmy · #2 01-26-2008, 07:13 PM

I guess I think it may have to depend on what the foriegn markets do. I know if we have ripples, a lot of the foriegn exchanges have tsunamis. (I think thats pretty good for the parasites). Do they have a similar effect on us when they tank? Or is it just the world goes on sale for an American shopping spree?

CAL · #3 01-26-2008, 07:23 PM

A lot of the foreign market activity is defined by the US market, not necessarily the reverse. The currency rates are a prime example of this. For example, the dollar continues to slump against the likes of the Euro. Currently the rate is about 1 dollar to $1.49 Euro. However, that isn't to say that the foreign markets don't have an impact on the US market.

Zimmy · #4 01-26-2008, 07:29 PM

The currency values are more complicated than I thought before. Its all related to trade deficits/surpluses and a lot of other stuff too, right? I used to think that the currency was just traded like pork bellies and corn bushels. Isn't the currency is traded more like stock in a country based on performance? As opposed to a supply and demand driven set of factors. Or do I need to go play with my wrenches now?

VoTrooper99 · #5 01-28-2008, 04:00 PM

Like any other correction or deceleration of the market, the media likes to blow things out of proportion. The only people who should be concerned about this in the least are those who plan to retire this year and have to draw on their funds. Those of us still young enough to not have to worry about that for some time should rejoice! BUY BUY BUY and HOLD.