In fact, it's always a great time to lose money in the stock market. Because it's so easy to do. With the advent of Online Trading, it's even easier! But you can also make a little money, or at least preserve your principal, if you proceed with caution.
It's not that I'm totally down on the markets. But, for the most part, I am. Given the political climate, I'd be very cautious about investing in the market. I'm just sayin'.
However, if you are going to invest, I would just looking for on online broker. While I don't recommend active stock trading--unless you are a financial expert, and even then--well, look how about 95% of them have performed recently, and the whole financial industry in general, and think about it. Where was I? Oh, yeah. While I don't recommend the over-active day-trading style of online trading, a low-cost online broker and an investment strategy of dollar cost averaging can go a long way to making sure you don't lose all your money, and maybe even make some.
First, you look for a full service online stock broker--click on the links, I'm clearly talking about FirstTrade.com today, but you should examine all your options before investing your money--and then pursue a reasonably conservative approach of dollar cost averaging. Trust me, I wish that's what I would have done.
Dollar cost averaging is the practice of investing a fixed dollar amount at regular intervals (such as monthly) in a particular investment or portfolio, regardless of its share price. In this way, more shares are purchased when prices are low and fewer shares are bought when prices are high. Dollar cost averaging is also called DCA and constant dollar plan.
Contrast this to putting everything into Munder Net Net, for example, when it was near its all time high. Then, as the market fell, your investment continued to go down, until you have lost 80% of your principle. So, tough luck. However, if you had taken that same lump sum and put it into the market over an extended period--say, 3 years--you would have bought the lions share of your losing investment when the price was already low. Ideally, you wouldn't keep purchasing the same investment as it lost money year after year (and, psychologically, you'd be less likely to do that than keep your money in the same losing investment, year after year). But, even if you did, you would have ended up losing considerably less (maybe 40% or 30% of your initial investment, rather than 80%) and, if you had been investing in something that didn't drop so precipitously, you might have ended up making 3% or 5% on your money, compared to losing 20% of it, if you had invested all at once with the stock or mutual fund was at a high point.
Retirement accounts based on stock and mutual funds depend on dollar cost averaging. If you typically socked your money away in the mattress, and then stuck it all in the market 5 years before your retirement, you'd stand a good chance of losing a huge chunk of cash, or making very little, on your nest egg. However, dollar cost averaging helps mitigate the highs and lows, allowing you to buy a fixed dollar amount ever month or so, thus meaning you buy more when the product is low and less when it's high, so you benefit more from rises in the price of your stock or mutual fund and are hurt less by drops. So, if you're thinking about trading online, I recommend you find a solid online broker with a good reputation and low charges. Second, dollar cost average. Or, like me, end up rueing the day you did not.
PS: Dollar cost average, even if you come into a large sum of money. Let's say you win the lottery or inherit $100k. Don't just stick that money in the market! If you want to put that $100k to work for you in the market, stick it in a money market account, then open an investment account where you put $2000 a month in an index fun, like a top Dow or NASDAQ Fifteen styyle fund--over 50 months. You'll end up better off in the long run.
Or just leave the money in the bank. Cash is king, after all. Cash is king.
Seriously, they are. Which is a good thing. Using a modern secular myth to justify looting the private sector and punishing the tax payer is reprehensible, and the more people who wake up to the same, the better.
The Jawa Report has a breakdown on how Axelrod and the Obama campaign are trying to make fake grassroots campaigns to smear Sarah Palin, while, at the same time, leaving a trail of smoking guns everywhere. No wonder the left like's to tell us they are the smartest and most ethical folks out there!
The Journal of Feminist Insight blog has a breakdown of softballs Charlie Gibson tossed Obama vs. the prosecutorial nature of his questions for Palin. Pretty damning stuff, indeed. For Obama: How does it feel to win? For Palin: Do you have enough qualifications for the job your seeking? And on and on and on.
Not classy, Charlie.
Apparently to folks of the left, the ends will always justify the means. Ruin people, lie, cheat, steal, anything short of murder (and, hmm, who knows, maybe that, too) is okay if it means you get universal healthcare and progressive taxation. Learning that, on the left, the end always justifies the means is why I'm not a liberal today.
