Think about this.
Stocks tumbled Friday on worries about the government taking a bigger chunk of Citigroup and a bleak reading on the economy, again touching 12-year lows. (source)
As Wall Street slides towards a 12-year low, it’s almost like getting back 12 years on your financial clock - and a great opportunity to get to all the investing that you have been planning and procrastinating and planning and procrastinating … but never really doing anything about it.
This especially applies to people like me, who, just a few years ago, procrastinated much without actively investing, and thought that they missed the bus on making big bucks in the stock market.
The cash percentage in this portfolio will give you an idea of what I am talking about.
I now have a chance to invest some of that cash 12 years ago - with valuable diversification lessons from the past couple of years. 
Well… what happens if we hit 24-year lows?
For people like me, that would be an unprecedented opportunity - assuming you believe that markets will have to go up sometime in the future. The time-frame over which this happens is not really predictable, but one can’t stay eternally pessimistic, you know.
Way forward: I am thinking dollar cost averaging and some key ETFs (having a healthy volume).
I have had doubts about dollar cost averaging in the past; but given the current situation, I have sort of started appreciating the value of investing that way - small steps at a time. Of course, the gains are small and slow, but so are the consequences of failure. I bet the slow and steady are surviving this crisis a lot better than the fast and furious.
ETFs (by their very nature) mitigate the risk of losing a bunch of money on individual company bankruptcies, but they have their own pitfalls - read this to understand how ETFs have the potential to put you in a hole if you are not careful.
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Ha ha! Wow! When I tell people that many are still in denial about what is happening, they look at me like I’m crazy. And then I hit a blog like yours (don’t worry, you aren’t alone) and I feel reassured about my point of view.
There is no escaping at least another 50% loss in all assets except cash. Well, perhaps we should pray that is how this turns out. Attempting to inflate out of this is still a possibility, but also is true suicide.
Search for ‘the market ticker’ and read through the past few months of facts on the ground. Ignore the rants and you will find yourself better prepared for what is coming.
Best wishes.
Robert, I understand what you mean - but there is an implicit assumption in what I am doing - I won’t be investing more than I can afford to lose.
Plus, I will be doing it over a span of time and that will dollar cost average the losses down.
Cash is working well at the moment but I am not sure about what’s going to happen to the dollar after the market starts flooding with trillions of dollars when the credit crunch eases a bit.
@ Brian, Nice site you have there. I guess with wordpress you now have more control of what happens as well as flexibility with access.
@ golburg - How many times will poor citizens go down this road - And not yet sure if the credit crunch will ease a bit as Robert said. I’d suggest it wasn’t a case of ‘too much information’ or the odd sensationalist headline that brought the markets down.
The real imbalance was in two massive information deficits: that between what banking chiefs knew and what their whizz-kids knew (or didn’t); and that between the protagonists of the financial world and a public with its livelihood and pensions tied up in it.
Thanks.
I love this thinking! If I invest now, it’s the same as if I had invested when I was 10 years old!. If stocks hit a 24 year loan, it will be like going back through time to before I was born and investing. Hot!
You’re absolutely right there Stephanie. It shows how bad the economy has been hit. When we can start comparing the economy with the early 90’s,then you know things are reall that bad. Back in the 90’s when I could buy stocks for $1 in top firms. Let’s start re-investing again..
But in nowadays there are big guys with big necks and they are dictating the market direction.
thank you for information
very interestingly)
Another HUGE day on Wall Street! Hope it continues!
I like the site, and agree generally with the sentiments. Generally it’s a good time to buy when most are looking for the exits. I was reading a few other blogs of people that have hit their ‘capitulation’ point. Feels like a good time to buy
regression analysis is a collective name for techniques for the modeling and analysis of numerical data consisting of values of a dependent variable (also called response variable or measurement) and of one or more independent variables (also known as explanatory variables or predictors).
I agree with your insights and find them really informative and applicable. I am thinking of reinvesting again after reading your post.
Hey, I justed wanted to give you a compliment on your blog, keep up the great work. I will be back to check it out in the near future.
This is a very interesting way to look at the current crisis. While clearly there are divergent views of where we go from here (just looking at the comments above, not to mention the endless parade of talking heads on TV), you can’t dispute our relative location vs. the past. I for one, agree, with your sentiments that if you are investing for the long-term, today presents an exciting opportunity. Emphasis: long-term.
It’s been a while now Gol since you last posted an article on your blog. I was expecting to read a post on April 1st. At least share with us any thing rather than a financial age recession story..Hope to read from you soon.
why crisis in the world
because are not we able to manage the economy
or simply who that thereon very much began to work money?
Ok but what do you think is happening now with printing all these dollars
At the rate the stock market is moving you can make up those 12 years in a few more months.
I don’t think this present predicament will seize by mere improvement in the stock market. The economy as a whole need to take some drastic measures.
Where did you lost man, why you are not writing anymore
the article pleased me
Robert,
I think cash will lose 50% of it’s value as well. The only way the government can pay back debt is by printing a lot of money and inflating their way out, or by legitimately making money. I don’t think the latter is a realistic option.
Nice article there,
I agree with your article and find them really informative.
Can’t wait to read more of your insights.
Nice article there,
I agree with your article and find them really informative.
Can’t wait to read more of your insights. - kim of Travel HQR
I would just purchase an annuity account, lock in a high interest rate, and forget about losing in the stock market. Plus the money grows tax deferred and the interest compounds as well.
You’re absolutely right there Stephanie. It shows how bad the economy has been hit. thanks for the information and it is very interesting.
It’s crazy to look back on days like this to see what happened in the markets. Seems like so long ago…
Im doing financial Accounting Homework. It says DEcember 10,1990 Amount in account is 50$. Then says Under 30 days, 30 to 60 days, 60 to 90 days, over 90 days. Question is extend and age account?
I found this article very interesting, although i found your comment about the danger of ETF’s slightly troubling. I have found that with successful rebalancing the risk of ETFs is slim to none. Sites such as http://www.marketriders.com can instruct one on how to accomplish this.
How does “age regression” work and what is its purpose usually?
Robert Kiyosaki says more millionaires are created during time of recession than any other time. It’s all about knowing when to sit and when to act. I think now is the time to make investments that others are running from because if everyone was buying it is too late. I am looking at a company called Mentor Capital (MNTR), which I learned about after reading a convincing article on Breast Cancer Investing. I think now is the time to move so I am doing my due diligence before going in.
you are absolutly right in your work which is putting the person on the right track through your ETF. which is making the users slim
My Question is same as Amenda Animal Trainer that How does “age regression” work and what is its purpose usually?
But in nowadays there are big guys with big necks and they are dictating the market direction. Thanks for this info.
Plz Tell how to calculate regression, correlation and other financial and mathemetical calculations in Scientific calculater
At what age does financial aid cease to account for one’s parents’ income?
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