with the stock market doing what it is doing? stocks usally have a 10% a year interest on avg dont they? won't it seem like a lot less now?
2007-08-02 05:51:43 · 7 answers · asked by dabo 1 in Business & Finance ➔ Investing
It's not as discouraging as you might think. Just because the market is on a downturn doesn't mean that it's a bad time to be investing in 401K or IRA's.
Actually when stock prices start tumbling, that is the best time to buy. A lot of people start selling, selling, selling when instead they should be buying, buying, buying. The reason why one should do that is because right after the market normally hits a downturn you'll see a large spike back up. It's best to sell when it is high and peaking. Then buy back in after the stocks tumble.
I try looking at the fund's overall performance both in the short term and in the long term. I never really look beyond the last past 5 years of performance. A person needs to invest in funds that are doing good both in the short term and in the long term. I'd much rather have a fund that consistently and gradually goes up than one that jumps all over the place.
You have to keep in mind that it will jump partly in accordance with the way the market jumps, so expect it to jump around at least a little.
2007-08-02 06:02:31 · answer #1 · answered by devilishblueyes 7 · 1⤊ 0⤋
It's discouraging because you're starting with small numbers. People think they have to have a lot of money in order to begin investing. Not true. Early and small-but-consistent outperforms late and large. So don't be discouraged. Max out a Roth IRA and if you're working for a firm that has a 401(k), contribute at least up to the level to get all of the matching contribution.
From day to day, everything that happens in the stock market does is noise. You have to ignore it. The major, or primary, trend changes only rarely -- a primary trend is years' long -- and that's the only one you really need to pay attention to. Should you have sold out of stocks because of the recent drop? No, because the primary trend is still up. So don't be discouraged. Just monitor the primary trend.
2007-08-02 08:34:32 · answer #2 · answered by Andy 3 · 0⤊ 0⤋
The biggest problem in getting young people to invest in IRAs and the like is that they are quite sure that they will never get OLD. Mom and Dad are old and we hope they did something, but retirement is for OLD folks and saving for it now means a smaller vacation or something.
Well, truth is, young folks, you will get older. No known cure. And you will prefer to retire well off than hand-to-mouth. And the time to take action is today. Time is you ally here. The market of today is the same as it always has been -- it fluctuates. Spend some time learning how to ride the fluctuations and you can do better than some paid adviser. In any event, put some aside now.
2007-08-02 07:18:39 · answer #3 · answered by ZORCH 6 · 0⤊ 0⤋
The S&P 500 has had an average rate of return of 10% per year for over 70 years, but in any one year it can be up or down by a much greater amount. This can be "discouraging" and dangerous for old people who need the money to live on, but not for young people who are investing for the long term.
2007-08-02 05:59:21 · answer #4 · answered by r_kav 4 · 2⤊ 0⤋
No. The 10% return is over long term...10-20years. There's no better long term investment. None. So don't worry it will go back up. I promise.
2007-08-02 05:56:59 · answer #5 · answered by Anonymous · 1⤊ 0⤋
The market is on sale right now
2007-08-02 05:56:03 · answer #6 · answered by Anonymous · 2⤊ 0⤋
Yes.. i too agree with you
2007-08-02 05:55:24 · answer #7 · answered by Anonymous · 0⤊ 1⤋