Why is the market going up SO DAMN MUCH???!

[leftyandproud]

Ok, maybe I'm just p!ssed because I pulled 95% of my cash out of the market 6 months ago..I just have absolutely NO CONFIDENCE in this administration to manage the economy...In retrospect however, I see how I probably made the biggest mistake of my life. All of my co-workers 401k accounts are up dramatically, wiping out pretty much all of the losses of the past two years, and I sit here in a crappy money market earning less than 1% during the same time period. The DOW and S&P are up 30% and the tech stocks are up 50% over the past 6 months. So what do I do? With 6% unemployment, how the **** can stocks be up??? This proves beyond a doubt to me that big business is NOT on our side. These corporations are able to inflate their stock prices endlessly by firing workers...wall street thrives on this. The reason I posted this is because I'm trying to get some perspective, and I'm worried that if this continues, our hopes of winning next year go out the window. Big business is obviously doing whatever they need to do to prop up their stock prices in time for dubya's re-selection campaign next year, and there isn't a damn thing we can do about it? Should I buy now and put my money to work for dubya?? HELL NO!!! Besides, I can't bring myself to buy the same mutual funds I sold at such a higher price..

urrg, I'm not sure what the point of this post was...I guess it's my first RANT ever on DU...I'll sit here and sulk, and see if anyone has any advice/opinions..

[gratuitous]

1. Death and destruction sell

The stock market is getting more and more like a casino every day. It's the province of the quick hitters and the scam artists, and if you're not involved in-depth for every turn of a card, every roll of the dice, your chances of getting fleeced go up.

[Beetwasher]

2. Layoffs increase the bottom line

Less payroll equals more profits. It's that simple. There's going to be a big reality smackdown however because the housing market is starting to fade due to increasing interest rates, consumer spending is decreasing due to joblessness and gas prices are skyrocketing...It's just another bubble that's based on absolutely nothing. There is no foundation to this market upsurge at all...

[onehandle]

22. Nailed it. nt

nt

[ComerPerro]

41. Spot on

Good call.
Its interesting that the media trains us to see the market as the one factor that dictates the state of the economy.

After all, who cares if people are working, as long as CEOs are making millions of dollars a year?

[fertilizeonarbusto]

3. bubble

eom

[leftyandproud]

4. ...

NASDAQ

http://chart.bigcharts.com/bc3/quickchart/chart.asp?symb=nasdaq&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&size=2&state=8&sid=3291&style=320&time=8&freq=1&nosettings=1&rand=3090&mocktick=1&rand=3366

S&P500

http://chart.bigcharts.com/bc3/quickchart/chart.asp?symb=sp500&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=2&size=2&state=8&sid=3377&style=320&time=8&freq=1&nosettings=1&rand=2896&mocktick=1&rand=2804

In case you're wondering, I sold during the little 'hump' in mid-Feb.

[kentuck]

5. It's a big old "bear trap" !

Those that plan on holding their stocks will lose and those that sell at the top will profit... It's a lottery game.

[WhoCountsTheVotes]

6. Insiders are selling, corporations are pimping those stocks

Just like when Merril Lynch was doing fake research to hype the money-losing stocks of their clients, it looks like the insiders are selling and brokers are still pimping overvalued stocks to the greater fool.

[slappypan]

7. its spooky, isn't it?

I reduced my exposure to stocks last January and I am mostly staying out for the time being. I don't understand this at all.

"The market can stay irrational longer than you can
stay solvent." — John Maynard Keynes

[DemocratSinceBirth]

11. Keynes Was Right

If you are going to invest the best strategy is to buy and hold. It is extremely difficult to time the market.


You also need to keep in mind that there are long periods in American history where the market moves sideways.


I believe the market stood at the same place in 1951 that it stood in 1929 and it stood in the same place in 1982 that it stood in 1966. That's a long time......

[Vitruvius]

38. Sometimes, it's EASY to time the market -- esp. for Democrats --

I dumped most of my 401K stock starting the moment Bu$h* was selected -- everybody knew he'd wreck the economy.

Now there's an election rolling around. So the Rethug ruling class is pumping up the stock market -- and the Fed is advancing the money to do so. They'll do their best to make the market advance right thru election day 2004. With any luck, they'll do so (with some setbacks).

It is, of course, a bubble this time -- but it will be a great SELLING OPPORTUNITY for those who didn't get out of the market when Bu$h* got in.

The best job was done by Pres. Hoover in 1927-1928 (also with the help of easy money from the Fed); the market roared ahead like a locomotive (in the parlance of the day). There were some setbacks in 1929 tho'.

So if you still have stock, be sure to dump it before the election...

[not systems]

8. They are printing money

500 billion of it.

This money is being directed into the hands of
the rich, who have nothing better to do with it
than buy stocks.

[wtmusic]

9. If you're young, put your money in the market and leave it there

Even now. After many lost $$ I learned the hard way...

Unless you're a trader on the floor of the NYSE and choose to make that your career, buy a current issue of Money magazine, find some good mutual funds, buy in and forget it.

You'll not only be a happier person, but you'll be richer too. Market timers win part of the time, in the short term. Market timers lose all of the time, in the long term.

[uptohere]

43. there are many solid stocks that are great for buy and hold

mutual funds nail you pretty hard with fees and were designed to make money for the fund managers, not you.

[wtmusic]

56. Designed to make money for the managers(?)

The managers only make money if the fund does well. Their jobs are on the line.

Yeah there are fees. But unless you like to put all your eggs in one basket, you're still better off in funds. The market, over a long time, is a sure thing. Individual stocks are not.

[Tandalayo_Scheisskopf]

10. This is September...

Soon to be followed by October. Do I have to explain October, markets and crappy economies to you? ;-)

Patience, grasshopper. Patience. There is no fundemental explanation for an up market in a consumer economy that is losing jobs like a body loses blood when the femoral artery gets cut. The wall is close and they are gonna hit the damn thing.

[lynndew2]

51. Things will wither in the winter...

But as long as the roots are strong they will flourish in the spring and summer....:bounce:

So sayeth Chauncy Gardiner...lol

[unfrigginreal]

12. Here's a laymans opinion.

The market is extremely sensitive to pronouncements by the Gov't and the Wall Street media. Now, the administration has been telling us that the economy is improving since January of 2002. The Wall Street media has been crowing about a 12,000 Dow for about the same period.

It's just a reverse of when the Bush flunkies were driving down the market during the 2000 campaign. If you remember, you didn't *know* that the economy was getting bad until Bush and his cronies told you in 1999.

The big question is at what point does the reality outweigh the rhetoric? I personally wouldn't be comfortable in stocks at this point but I do realize that Market conditions can be spun.

[DemocratSinceBirth]

17. The Market Is Supposedly A Leading Indicator

that has predicted nine of the past six recoveries...


That being said you can't have a rising stock market and a poor macroeconomic situation indefinitely....


Eventually the market will reflect the larger economy, good or bad....

[mistertrickster]

13. What's your timeline?

Historically, the stock market goes up about 8 percent a year on average, more with dividends re-invested. (Some have questioned this statistic because bankrupt companies are wiped out and "not counted"--others claim they are counted--it's a debate.)

Anyway the theory goes that given enough time, your money should make the historical average. So if you're looking at a twenty year time frame, you might want to take ten percent of your money every month or two and buy back into the market.

On the other hand, if you're gonna retire in less than say, five years, it was probably a smart move to cut your losses.

I think timing the market is impossible for the small investor--that's why I just keep plunking a small amount in every month counting on the historical average to hold up. On the other hand, we might be headed to another 1929.

Fact is, nobody knows. You just have to look at the information, such as it is, and draw your best conclusion. To me, that means staying in for the long haul. History shows that's the best payoff. There may be another major depression--Lord knows, Bush is the closest thing to Hoover we've seen in 100 years--but if everything goes belly up, at least I have the satisfaction of knowing that I based my decisions on the best available information, and that's all the better any of us can do.

Good luck, and don't worry about money (well, not too much anyway). There are a lot of bigger problems to worry about, IMHO.

edited for typos

[DinahMoeHum]

14. Check your private in-box. Thanks.

n/t

[catmandu57]

15. There's nowhere else to go

is what I'm thinking the return on savings is abysmal right now. Everything else is long term and people still want the quick and easy payoff, plus herd mentality.
I believe this herd is heading for a cliff though, there is too much bad stuff out there thats going to pop this bubble.

[Yavin4]

16. You Did The RIGHT Thing

The markets are going up for one simple reason: CHEAP DEBT! The prime rate, the interest rate for which banks base their lending decisions, is at an historic low of 4.5%. Layoffs and the refinancing of debt have made the bottom line look better without any real increase in sales. Yes, your friends may be doing well for now, but if interest rates tick up just a hair, your friends will be wiped out.

Remember, you're investing for retirement, not to become rich. My humble advice is that you seek out high grade bonds and high grade stocks that pay a dividend. Don't get caught up in the market hype. Most stocks are way overvalued. If you get back in now, you're far more likely to lose money than make money.

Your focus should be on keeping a steady stream of money coming in no matter what. That's why high grade bonds or stocks that pay dividends are some of the best investments. Get rid of your debts and keep a stream of cash coming in and you'll be fine.

[Flying_Pig]

18. The money-lenders in the temple....

are going to pull out all stops, and all reserves, to throw it at the market, in an effort to give Bush a good economy for the election. I am sure, though I have no proof, they have been holding back.

Corporations have been putting off purchasing, re-tooling, and re-stocking. They have also been holding off on hiring. I expect they will kick it all into gear to give shithead-whistle-ass some numbers he can wave around for the cameras, in an effort to seduce the idiot masses. They desperately want to keep Bush in office.

Of campaign contributions made by the top 500 corporations, probably 80% went, and are going, to Bush and the Repugs, proof, once again, that these right-wing, greedy f**ks, are the enemies of the people. It's all about greed, and sustaining the climate and people they need in government, to keep on raping this nation, and the world. It's way past time to make them pay for their crimes and greed, and I hope whoever is the Dem candidate, will see to it that justice is done, and that proper retribution and restitution is made.
:mad:
Grrrrr!

[leftyandproud]

26. ya know..

Now I realize that big businesses are, and ALWAYS will be the enemy of the left(our enemy!), I kinda feel good not having my money helping them. I'm not playing a part in the corporate exploitation...Even if I miss a 50% run, I'll know am on the right side of things morally.

[Yupster]

36. So your money's in the bank

getting loaned to businesses instead.

[bif]

19. Defense spending

The defense contractors are raking in billions.

[amazona]

20. whoa...losses are nowhere near being "wiped out"

The market is still down quite a bit over its peak. Also, keep in mind, whenever a stock goes bankrupt, it is removed from the exchanges. If you had investment in leading Fortune 100 companies like Enron, WorldCom, United Airlines, etc. then you completely lost that part of your investment, and it can never come back.

Think back to high school. If every time you missed a test and got a zero, this test was removed from your average before calculating your grade, we could all sleep in and skip exam day and be class valecdictorian without any effort! :-)

Seriously, as an investor with very little income who had planned to live off my stocks until the junta happened...people have seen some recovery from the worst of the disaster but not everyone. People who bought on margin were wiped out and can't recover those losses, and people who had stocks that have declared bankruptcy can't recover those losses. The illusion of the market being "up" at the moment is a pleasant one but it is a false one.

Many people are poor record keepers and have poor memories for events going back more than a few weeks. But I promise you, I personally know people who lost as much as a million dollars or more in the market. They didn't get it back. They are in the process of painfully starting over but they can never fully recover -- well, obviously not, as a couple of them have passed on now, and some others are in their 60s.

The bull market of the 1990s is not going to come again. At this time, people are investing in stock because where else can you go? You can't make any money with "safe" investments like CDs at these interest rates....I think Alan Greenspan has a project to relieve the old people of all their investment capital because you have to go into principal now with these terrible interest rates. With nowhere to turn, people continue to buy stocks. That doesn't mean it's a wise decision. In fact, I believe your analysis is correct, and it's a foolish one. But we are desperate to do something. Not everyone can work, and now there is no way to make our money to make money either? What is a person to do?

[ElsewheresDaughter]

massive DEFENSE spending!!! death sells

[w4rma]

21. Big corporations are going overseas for cheap labor

The stock market isn't really a good indicator of the American economy since it doesn't take into account small buisnesses, jobs and the wealth of the middle and lower classes.

[sandnsea]

23. Remember Reaganomics

Unemployment did go down under Reagan, but I also recall they changed the way they counted the military during that time which changed the actual numbers. In any event, job creation was actually down under Reagan from Carter. GDP was up, but we now know it was alot of deficit spending military expenditures. The stock market went up, but it was alot of cost reductions and mergers/acquisitions. And kaboom, the whole thing crashed in 1987.

So I would wonder whether corporations have atually gotten back to real production increases and real revenue increases. That PE ratio thing, if I'm not mistaken. If that hasn't improved, I wouldn't think this is a real rally. Times now remind me an awful lot of 80's economics, it didn't work then, it won't work now.

But I don't really know anything about the stock market, so don't invest based on my opinion! By the way, isn't gold still going up? Not usually a good sign for the stock market, am I right on that?

[Sick of Bullshit]

24. The wolves are setting the sheep up for slaughter

and with the new "corporate accountability" laws (actually, the lack thereof), there won't be much that little investors who were cheated will be able to do.

I wouldn't touch this market with a 39 1/2 foot pole.

[WillyT]

25. Wonder What Will Happen When The Housing Bubble Collapses, And...

we have to withdraw from military adventures in the middle east???

Aren't those the only two things propping up this "recovery"?

:shrug:

[Kahuna]

27. I ain't complain'. I'm up 76% this year.

:7

Of course, I still haven't nearly recovered all of my losses. :-(

[uptohere]

31. ditto, 89%

not recovered but the pain is easing...

[KoKo]

45. ROFL! Kahuna.......see my post #44! yes.....we could feel good if the

market had come back to where we purchased and zoomed past it......couldn't we! Buyer Beware!

[revcarol]

28. Stopped putting money into my IRA...

keeping it in CASH...IRA up about 8% recently after it lost 45% and it is diversified...no retirement until 72, looks like.

No place to put money unless you can afford to lose it...still have a couple of high interest bonds...

Believe many small investors "investing" in the market now that dividends are not taxed and they get SOMETHING back for all that money spent, at an astronomical PE ratio, though. And if the economy keeps sliding, they will have to sell at who knows what price...

[grasswire]

29. consider yourself exceedingly fortunate..

...compared to many DU-ers whose lives are centered around keeping housing and finding work right now.

Maybe you'd have less aggravation if you gave the excess money away to charity or invested it in democracy.

[revcarol]

32. Count me among those who are seeking work

and might lose housing at any moment.

I just count myself lucky that I had savings to spend when, for a year, I had ZERO income, except for those bonds, which averaged out to $27.00 per month. I just hunkered down, turned off the electricty,bought a lot of ramen and food on sale, did keep my one luxury: my internet connection and telephone.(I'm not saying 'Welcome to my pity party,' because I am one of the FORTUNATE ONES, going down from middle class to lower middle class, not to poverty!!)

SOCIAL SECURITY of $727 per month saved my bacon, and I'm glad it was there. But I still want a REAL JOB!!

[uptohere]

30. its not too late, move your money !

you may not get as much of a bump but things are going to continue to rise.

OK so you missed it (you might want to rethink investment options more often than every six months) but that doesn't mean you have to punish yourself further not does it ?

Go on, get going...

[maggrwaggr]

33. don't buy now whatever you do

wait until after October. Or better yet, wait until January.

Look at it this way. At least you ain't losing money. Which I think you will if you were to buy into it now.

Or if you don't sell pretty soon. :)

The market's gotten way ahead of itself. Mainly because the bond market went kinda sour. So all that money which had been in bonds, a lot of it went into the stock market.

Stocks are still wildly overpriced. For the most part.

[Kolesar]

34. so you are saying I should sell my equities?

:-)

[terryg11]

35. stocks are not necessarily an indicator of current conditions

but often reflections of what people think will happen in the future. The stock market only has so much to do with reality and the rest to do with what people think, feel, ARE TOLD TO THINK, or it's being propped up by the wealthiest five percent in order to keep it running.

[Yupster]

37. As a stockbroker,

I'm having this same conversation with my customers who didn't listen to me and sold 6 months or a year ago. I made them sign a sheet saying they understood that I thought they were making a mistake.

Incidently, it is strictly forbidden for a broker to give investment advice in an internet chat forum.

[StandWatie]

39. should have bought Haliburton and Bechtel..

[indepat]

40. Could it be the market is being gamed as it seemed with the California

energy market?

[Name removed]

42. Deleted message

Message removed by moderator. Click here to review the message board rules.

[KoKo]

44. Here, this will make you feel better, and give you perspective: I bought

"QQQ" which is a Nasdaq Index of Leading Tech Stocks (supposed to be safe) at the end of 1999 for $77 a share. I ended up selling it when the market started to implode at 34. QQQ the Index Stock of the Nasdaq Leading Tech Stocks is as of Market Close today $33.85.

Now, if I still held that stock index for three years at $77. a share.....and it closed at $33.85.....what would I have made? Or, what would I have lost is the better question. Putting my money into something safe like a Series E Govt. Bond?

Think about this. I'm glad I sold it and went into my Money Market fund....because even at 1 1/2 to 2% I have made some money over those years.....whereas....if I'd held it.....how long will I wait for it to get back up to my purchase price of $77.? I did this with many stocks I owned. I went for safety......It isn't the 15% I was earning in the boom years.....but I feel good......I can sleep at night......this is a "Traders Market."

And, folks who bought high and didn't sell are still waiting for Clinton's Boom to come back. If you are very young, and want to buy in now.......it might work for you. But, anyone who got caught buying high and selling low......would be foolish if they are still waiting.

Just giving you some perspective, for whatever it's worth. And a Chart of the performance over 5 years of Nasdaq 100 tech stocks! Some of the techs have moved up.........but you'd have to be a "seasoned stock picker who likes to go to Las Vegas to figure out which ones aren't being hyped....or are a "professional trader's picks to pump up."

[Yupster]

50. Somebody told you that tech stocks

were safe?

[leftyandproud]

46. ..

bump

[KoKo]

47. Kick!

:kick:

[KoKo]

48. Kick!

:kick:

[leftofthedial]

49. layoffs, war, and deregulation

they hit the trifecta!

[okieinpain]

52. just like ann coulters books can be rigged, so can the

stock market. all bush's supporters have to do is keep buying stocks. hell they when out any way, because the followers help push up the value of the stocks, making them more money. then they help get bush reelected who turns arounds and gives them tax breaks all the way to the bank.

[fleetus]

53. I have some similar conflicts of interest...

...in my opinions and actions within the stock market.

I feel that corporations are largely the enemy of humanity. These guys (CEO's) are obligated, by job description, to one thing - the bottom line. Unfortunately, everything else gets pushed aside to make way for this. Why America gives rights intended for humans to an entity with no human interest is beyond me.

But at the same time I am in the fortunate position to have disposable income. With my extra cash my strategy is as follows:

I give a decent chunk to chairity, which I highly recommend doing _before_ investing in the market. (I noticed "grasswire" mentioned chairity as well on this thread). The best thing about chairity is that it rarely lets you down if you choose wisely who you give to.

After that, I invest mostly in the stock market (about 70%) and the rest in bonds and cash. I follow the rule of putting "100% minus my age in years" into the stock market because it forces me to shift to safer investments as I get older.

Despite the ethical problems I have with corporations, I can't force myself to pull out of the stock market because I haven't been able to find any other investment vehicle that lets me reach my retirement goals. I have not stopped buying since I started investing 8 years ago. I use mutual funds because I figure those guys have a vested interest to do whatever market timing I would want to do but forget about due to lack of interest.

One thing you might consider is giving investment another try using the dollar cost averaging method. Dollar cost averaging does not involve ANY market timing and it has a proven track record. If you really believe in this method, it will help you avoid the temptation to buy high and sell low.

One last thing I wanted to mention is that socially responsible mutual funds do exist. You could request a prospectus from several socially resposible funds and find one or two that are close to your views politically. Almost like figuring out what political candidate you want to support.

Final point. Liberals need to make money too. We spend it much more wisely than the other guys. Don't let one bad experience with market mis-timing stop you from reaching your financial goals.

[twilight]

54. its called a 'suckers rally' ... get real

The DOW is going up because of big business in my opinion and all of their underhanded dealings. We have seen several ENRONS and there will be more!

I had money in the market from 1996-2001 and got out of it (my IRA). I made money and its now in a CD where it is safe and I don't have to worry or think about it.

I had money in mutual bond funds very recently. There was a huge rally in bonds and money was being made. I sensed the top and sold the whole investment. Now those very same funds which I sold at the end of June are down about 10% or more!

There has been a 'bond market crash' and no one seems to have realized it. So now you take what is left and dump it into the DOW hoping to make money there.

My answer on this is that the whole thing is so corrupt and bogus that I don't want anything to do with it.

You might wish to read this link from the Economic forum:

http://story.news.yahoo.com/news?tmpl=story&cid=68&ncid=716&e=17&u=/nyt/20030903/ts_nyt/mutualfundsallowedfraudulenttradingspitzersays

More scandals! More scandals!

Perhaps I will change my mind later when sanity returns to our Nation. Look at these mutual funds prospectus' ... do you want YOUR money invested in Halliburton, Bechtel, Monsanto, Nestle ... I could go on and on and on and on. My answer is NO, I don't want my money invested in this kind of trash even if it is making money right now.

In case you haven't noticed, the economy is in a state of chaos and disrepair in my opinion. Houses are for sale all over and they are not selling. There are more people unemployed now since when Herbert Hoover was President. Study the year 1928 if you can. You'll see some very frightening parallelisms I believe.

If you want to invest in this go right ahead, but I frankly don't care to invest in the reselection of GWB which is really what it is all about.

Its pump and dump right now.

Stay in SAFE investments! Invest in a candidate running for President that appeals to you. Now that is a GREAT investment if we are able to be rid of *!

America is quickly going broke in case you haven't noticed - a $500 billion $ deficit? Or is that another lie too?

:kick:

[dionysus]

55. I don't buy it.

The dow is in the 9500s right now. whoop dee doo. I don't know anyone who has made dramatic gains in their 401k, and we've got a wide selection of funds. The funds that have been doing the best over the last two years have been international bonds.

No one's seeing a %50 run.