Is the stock market expected to drop significantly in the next six months?
Persephone85 asked:
My financial advisor advised me to move more of my investments into the bond market. He said that equities have been at all time highs, and the market is expected to correct itself sometimes between summer and this winter. However, I can’t find any articles on this expected correction. Anyone know more about this? Also, what are some good online news organization where I can read articles about the stock market?
My financial advisor advised me to move more of my investments into the bond market. He said that equities have been at all time highs, and the market is expected to correct itself sometimes between summer and this winter. However, I can’t find any articles on this expected correction. Anyone know more about this? Also, what are some good online news organization where I can read articles about the stock market?
Tags: All Time Highs, Bond Market, Financial Advisor, Investments, News Organization, Six Months, Stock Market
September 17th, 2008 at 3:44 am
hopefully not. but i heard every thing starts to pick up arround summer time.
September 17th, 2008 at 1:58 pm
Yes, in November. Or the end of October. I can’t remember which one it happens in.
September 19th, 2008 at 2:53 pm
ive noticed that the stock market usually drops during the summertime, i would take your financial advisor’s tips. im really looking forward to that drop to pounce on a stock i had my eye on for a while now. i dont really look at online news articles about the stock market but i do watch CNBC a lot. hope that helps!
September 21st, 2008 at 6:00 am
Corrections only happen in bull markets. I would suggest you use a trailing stop 10-25% and re-enter after the correction is over. As to where you can find info about the stock market, try Stockcharts. com
September 21st, 2008 at 8:05 pm
there should be correction… But Noone knows…. when…could be next month or next year..after 2 year………. you never know.. thats why called BULL…..market…
there are thousand of factors apply to stocks… and it depend on how the rally take….
But this is true.. U.S economy is a big factor behind this….. everthing depend on economy…unless and until this rally continue….Maybe you see more high price… ….
September 24th, 2008 at 12:10 am
Your advisor is correct on these points:
-equities are indeed at all time highs (well, the Nasdaq’s still not quite there, but that 2000-time-frame peak was an abberation)
-the market will almost certainly have a correction in the next six months
-the market is often flat or a little down in the summer
However, timing WHEN a correction will occur is difficult. If you are investing for the very long-term, then you may be just as well off ignoring the correction. That is, if it IS a correction and not a severe market breakdown (like ‘87 for example). But even given that, your advisor may still be steering you right if — depending on your age and expected retirement date — he feels that you’re overinvested in stocks.
P.S. you may want to contemplate moving that portion of your money into money market funds or cash equivalents instead of bonds — the bond market may not be too good in the next 6 months either.
Online sites that I check regularly:
September 26th, 2008 at 9:50 pm
I am a Portfolio Manager with over a decade of experience in the Stock Market and I sugest you to stay away from bonds.
The economy of the United States of America is very slow but we are not in a recession yet.
You can invest in a few foreign companies (ADRs) where the Economy is actually growing fast and you will be fine.
You can also sell short a lot of bad companies and if the market goes down you will make money.
You could sell short Photronics (NASDAQ:PLAB) and you could make money if the stock price goes down.
According to MSNBC the Economy of the United States of America will grow in the coming months.
I also suggest you to fire you Financial Advisor.
If you need Financial Advice then drop me a line.
I will help you for FREE.
September 28th, 2008 at 11:52 am
News articles about the stock market will not help you invest. You need to read a book called “A Random Walk Down Wall Street”. For a brief summary of the Efficient Market Hypothesis and the Random Walk Theory, download my free book at and go straight to chapters 7 and 8.
No one can know which direction the markets will take. Hence, you should not set up your investments based on where you think the market is headed. You should set your investments up based on your time horizon. If your time horizon is less than 5 years away, then you should not be in stocks at all, IMO.
Let me quote something from my favorite author, William Bernstein, in his book “The Four Pillars of Investing”:
“A young person should get down on her knees and pray for a stock market crash, so she can then purchase her retirement shares at firesale prices.”
If stock prices fall, stocks are cheap and future returns will then be higher. You do not want to sit on the sidelines if the market crashes. Let your investments ride and then continue adding new money to them, buying stocks at cheaper prices.
September 28th, 2008 at 2:06 pm
They say “sell in May and go away” as the markets generally slip or slide sideway in the summer whilst the boys are larging it in the Hamptons.
Yes, there is a risk that the market will bomb soon and the question is how much panic selling this induces and then how far it falls. The good thing is that there is plenty of money out there to mop up bargains like an earlier guy mentioned which will soften the drop.
You might like to diversify and do what’s called hedging - i.e protect yourself a bit from a drop but leave yourself open to take advantage, albeit less significantly, from any further rises. The key is what are your financial aims for your portfolio? If your advisor hasn’t taken you through this stage and/or if you don’t understand the output then I suggest that you go over it again or switch advisor. He’s not totally off the wall with his view but the impact of his prediction on you will actually depend hugely on your perspective so no-one here can give you a more definite answer I’m afraid.