Wednesday, February 28, 2007
02/27/07 Market and Me
Disclaimer: I'm not a stock analyst. I'm just an average guy that pays attention to this stuff and knows just enough to be a danger to himself and others.
If you follow the stock market at all, or you listen to the bobble-headed chicken littles on CNN, you probably noticed that the U.S. stock markets took a tumble yesterday. In fact, the drop was the largest single-day drop in five years, wiping out the gains for the calendar year so far and making for fabulous sound bites for the "The economy sucks! Alarm! Recession! The sky is falling!" pundits of the cable news shows.
But, what does this stock market correction mean to me, FNN, the average investor?
In the grand scheme of things, it means next to nothing. Almost zero. I'm a firm believer that the slow, sure path to investment success is to buy and hold quality stocks and especially quality index funds. If you follow this mantra, then the daily market rollercoaster, even the large swing that happened yesterday, is almost completely irrelevant. I'm in it for the long haul, so short term gains and losses mean little to me.
If anything, I look at yesterday's sell off as an opportunity. Fundamentally, I don't think anything has changed about the market, so I see this next week as a golden buying opportunity, not as an indication of a long-term slide.
Really, what YFNN thinks it comes down to is this: Nobody really knows what yesterday’s sharp drop really means. Nobody ever knows what’s going to happen with the stock market. Not even Jim Cramer. I still believe the best bet for me and 99% of the folks out there is to just relax, take a deep breath, and remember that investing in the stock market is a long-term journey.
Keep on keepin' on.