A sixth straight week of stock gains

[TomCADem]

Source: Washington Post

U.S. stocks rose for a sixth straight week, giving the Standard & Poor's 500-stock index its longest winning streak since April 2009, as reports showed the fastest job growth in three years and higher-than-estimated retail sales.

Banks and retailers led the advance in the S&P 500, with Macy's shares rising 5.2 percent and Regions Financial stock gaining 10.6 percent. American Express was the Dow Jones industrial average's best performer, up 5.2 percent for the week, followed by Microsoft at 4 percent, as European Central Bank President Jean-Claude Trichet said he doesn't expect Greece to default on debts, boosting optimism that a financial crisis will be averted.

The S&P 500 advanced 1.4 percent to 1194.37 last week, building on its biggest first-quarter rally since 1998. The Dow climbed 0.6 percent, to 10,997.35. It exceeded 11,000 for about 10 seconds Friday, crossing that threshold for the first time since September 2008.

Stocks "remain in a powerful bull market," said Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn., which oversees $650 million. "Until something changes, it seems unlikely we're going to have a substantial pullback."

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2010/04/09/AR2010040906331.html

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Stocks are going up, so I expect the corporate media to talk about how the economic turnaround is only beneffitting Wall Street not main street. But, when the stock market drops, expect the corporate media then to run stories about how American workers are being devastated by the loss in value of their 401(k)'s.

Oddly, you never hear stories about American workers' 401(k)'s benefitting from the growth in the stock market, or Wall Street executives hurt by the declines in the stock market. You have to love that one way spin.

[CountAllVotes]

1. yep, we are almost back to 11,670

that is where it was in the year 2000! WHOOPEE!

:woohoo:

[TomCADem]

3. Amazing, Pro-Business Bush Had A Negative Stock Market Return...

Yet, Republicans are hailed as the party that is good for the economy.

[CountAllVotes]

4. yep, the lost decade

as it has become known. Sad really.

I don't like the stock market, never have. Too risky for this gambler here. }(

[paulsby]

6. there has never been a 20 yr period in history where DCA'ing into the stock

market didn't get positive gains, and in most cases outpaced the majority of asset classes

NOT investing in the stock market is what is truly risky

i make a decent wage, but the best advice i EVER got was from my grandfather, and i started dollar cost averaging into the market when i turned 21

BEST ADVICE EVER

i also have a trading account and DO trade, as well as invest, but investing is the cornerstone of wealth creation

[wtmusic]

7. I wish I had the discipline to DCA

Mostly invest and wait, which isn't the worst way to invest.

[paulsby]

8. the longterm effect of DCA'ing`

is that you are buying more shares when shares are cheap, and less when they are expensive. in the long run, you get a very good average price.

even in periods where market performance is flat, you can get a return, since your average cost is not half bad.

it keeps you IN the market when everybody is panicking (dow sub 8k) and keeps you from overextending when there is euphoria (dow 13k+)

iow, it takes EMOTION out of investing

and as a trader, let me tell you - emotion is DEATH for a trader, and not good for an investor either

in poker, we call it 'going on tilt'

i know a trader who blew out a 40k account in ONE DAY doubling down over and over on a losing futures position.

THAT is emotional trading

[wtmusic]

9. I day traded for one year in 2000-2001

and it was the unhappiest year of my life. I had three computer monitors going at the same time, and actually ended slightly up in a year where the market was down 20%.

Over 800 trades in one year - my broker loved me.

[paulsby]

10. i daytrade futures

but have been too busy to do it lately. i love it, but it requires FULL attention, so if my mind isn't 100% in it, i don't do it

[wtmusic]

11. You have to love it

An acquaintance traded options, wrote his own contracts. Made a steady $20,000/year in his spare time, until he didn't anymore - and almost lost his house.

If you can make money consistently, more power to you.

[paulsby]

13. i am ALL about risk management

everybody thinks entries. i think exits.

everybody thinks "how much can i make"

i think :"how much am i risking and how much can i lose"

etc.

[NeoConsSuck]

15. emotion is DEATH for a trader, and not good for an investor either

Great advice! How many times did I get caught up in all the 'Run the sky is falling!', believing we were heading towards Armeggedon, and put everything back in cash, only to watch from the sidelines as the market rebounded, and I was on the sidelines holding my you-know-what!

I didn't touch my 401k in this latest Armeggedon or my SEP or ROTH. I kept contributing into them, and they've rewarded me nicely for not panicking the way I did in previous downturns.

I invest in riskier markets, emerging markets and commodities, and I learned for those markets, you must have nerves of steel. When they fly high, they soar, but when they tank, they do so in gut wrenching fashion.

[rhett o rick]

23. IMO putting money in the stock market isnt investing. It is literally gambling. nm

[Art_from_Ark]

24. The stock market is a sucker's bet

The House always wins. Outsiders are allowed to win occasionally to keep the money flow going. But there have to be losers to pay for the gains of the winners. And when a company like GM or Citicorp crashes, there are plenty of losers.

[wtmusic]

5. Historically, Democrats kick Republican ass on the economy

All the socialism is quite a boon to capitalism.

[Bluzmann57]

2. My 401(k) is doing well

Should I contact the msm and tell them? Nah, they are basically irrelevant anyway and I think they are starting to realize it.
They should also report that whenever a Democrat is president the eceonomy gets better. They won't, but they should.

[rfranklin]

12. It all means nothing if there are no jobs created....

and there have not been any jobs created since Clinton left office.

The other problem is that pay has stagnated since Reagan started the "trickle down" economics.

[DavidDvorkin]

14. The standard DU response

I've been out of work for 11 months, and I'm encouraged by the stock market's activity.

A growing stock market is one of the major elements encouraging the creation of new companies and the expansion of existing ones -- meaning, new jobs.

[rfranklin]

16. Most jobs are created by small businesses not listed on the stock exchanges....

so you can be encouraged as much as you want--there is no "recovery." This is a runup created by the big boys on Wall Street trading with free government money.

[tabasco]

18. Small businesses do better when big businesses are doing better.

Duh.

[DavidDvorkin]

19. Indeed. Most of my jobs

have been in small companies that sold their products to big ones. The big ones stopped buying, and the small ones started contracting.

[rfranklin]

20. You are claiming cause and effect?

Where did you get your Ph.D.?

[Iowa]

21. Yep...

It is a standard DU response.

The thing is, there are lots of regular working people, right here on DU, who either are relying, or will rely, on their investments to fund at least a portion of their retirement. A rising market will likely produce more spending among this group, which is a plus for job creation. Furthermore, the markets have an impact on large pension plans that are relied upon by millions of workers.

Stocks are no longer the sole dominion of the yacht club set.

[Art_from_Ark]

25. In the 1920s,

plenty of common folk were sinking their money into stocks. The stock market actually needs infusions of outside money to keep going. But the insiders know when to bail, while the outsiders can only hope that they don't get taken for a ride.

[Iowa]

27. No, not quite. There is some truth in your comment, but that's not really how it works...

That's how a lot of folks think it works, however. The thing is, this is an area where a little information can lead to the wrong overall conclusion. Some things are pretty easy to grasp and get right with virtually no effort. But some things require considerable time and effort to learn; investing is one of those things.

I started investing almost 20 years ago. But before I did, I spent countless hours reading everything I could get my hands on. I didn't keep track, but I would estimate that I read somewhere in the vicinity of 300-500 books and literally thousands of articles. If you do this, eventually you'll begin to see what's useful and what's complete bullshit. But this takes FAR more effort than most people are willing to put into it.

The problem is, there's a ton of bad information out there, so the only way you're going to make sense out of it all is to read so much that the good stuff begins to take shape, and the bullshit begins to fall away. It's brutal, but it's the only way I could find to get where I wanted to be. In the end I was left with a core of information that enabled me to not only understand many of the risks I faced, but also to know what I DON'T understand - and how to deal with all of it.

In your post you mention only one risk - insider trading. And although you don't specifically say it, you imply that insider trading is the primary concern that keeps you out of the market. If that's true, it would suggest that you should learn a great deal more before investing in the financial markets, and that your instincts to remain on the sidelines are correct - but for the wrong reasons.

There is a problem with reaching the wrong conclusion about the financial markets based on too little information: It keeps people who might otherwise do so from participating in the types of financial transactions that might enable them to rise above a paycheck-to-paycheck existence. I was able to do that, and I would highly recommend it.

[Art_from_Ark]

28. No, the thing that keeps me out of the market is the rampant dishonesty

Insider trading is just a small part of it. There is also the creative bookkeeping and company reporting, pump-and-dumping by supposedly respectable stockbrokers, CEOs giving themselves huge bonuses while dumping employees and being rewarded for it with a higher stock price, and the fact that stocks can be privatized, leaving small suckers, er, shareholders, holding the bag, among other things. And the SEC doesn't do a thing about it, because technically it's legal. Been there, seen that. Screw it.

[Iowa]

29. Yep, all of that happens...

And putting those specific risks into the proper perspective requires a thorough understanding of several things. Many (maybe most) people see these types of things, and like you they say, "screw it". I am incredibly thankful that I didn't.

[Art_from_Ark]

30. I wish that I had not been blinded by that crap

and put that money into gold instead. I would have been a lot better off financially today if I had.

[Iowa]

33. Yep, you shouldn't allow yourself to be blinded by anything...

It all goes back to information. The markets are actually quite counter-intuitive. Rigorous self-education is the only way I know of to avoid the usual pitfalls. Those who take shortcuts usually end up doing the wrong things, getting burned, and swearing off the system for good.

[Art_from_Ark]

35. What it all boils down to is

If you rely on some stockbroker, you can get burned.
If you rely on your own "due diligence" you can get burned if the company isn't telling the truth.
In either case, you have no recourse. Even if someone files a class-action lawsuit, the chances are that the best you can hope to get out of that is a voucher good for 5% off your next purchase.

[impik]

17. The better the job Obama does, the better the situation gets, the lower his poll numbers goes

Stupid country.

[rhett o rick]

22. Dont we all just love the bubble? Well hang on. nm

[ipaint]

26. Hooray for the top 10% who own 90% of the stock. I'll sleep better tonight knowing

the recovery is easing their pain.

[ZenKitty]

31. Three words..double dip recession.

Trades aren't happening. The market isn't moving. Hang on to your hats ladies and gentlemen...it ain't over yet.

[bamacrat]

32. Damn that socialist Obama.

Were McCain president the Dow would be the leading story every night.

[bemildred]

34. Indeed, curse him for ruining the Bush economy.

:sarcasm:

[Political Heretic]

36. Most American workers don't have 401(ks)

Less the 50% of America is invested in the stock market, only 34% of America has anything over a trivial 6,00k invested.

Of that 34% with over 6k invested, the overwhelming majority of that stock is owned by the top 10% of income earners in the country.

401(k)s are the game of the upper middle class to moderately wealthy, by and large - by the numbers.

Source:
http://www.stateofworkingamerica.org/tabfig_2008_05.html - see for tables, see Chapter 5 of the State of Working America Report by the Economic Policy Institute for more information.


As for the corporate media, they will never suggest that what's good for Wall Street isn't good for Main Street, so I don't know where you get the idea that they're going to be talking down the soaring stock market.