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The Dow's slide

Discussion in 'Political Discussion' started by Patters, May 18, 2006.

  1. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    The Dow has lost close to 500 points in about a week. This could be a short-term adjustment or reflect looming problems with inflation, debt, and so on. I don't know.

    One thing that has concerned me for awhile is that the price of gold is at record highs: http://futures.tradingcharts.com/chart/GD/M Gold is typically the thing that wealthy investors put their money into if they are concerned about the market. On the other hand, the Globe did a survey of MA CEOs, which reported that the most of them expect the economy to stay about the same.

    Might want to look at this, too:

    http://finance.yahoo.com/q/bc?s=^DJI&t=my

    What are your thoughts?
  2. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    We've just had one of the longest bull markets ever without a correction (I forget the % involved for both definitions) so it's not only not surprising, it's long overdue. The odds are very good that this is nothing to worry about.
  3. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    I'm not doing anything different, but I'm not so sure there's nothing to worry about. I read recently that during the last two years of a lame-duck President's term, the stock market tends to stay fairly flat. On top of that, there are inflation pressures, various real estate issues, and I get the sense that a lot of people are cutting back. I'm adopting a wait and see attitude with my 401K, but I may shift to being more ... ugh .. okay, I'll say it ... conservative!
  4. PromisedLand

    PromisedLand Virtual Internet Person

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    How did those wealthy investors do the last time gold was over $700/oz.?
  5. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    I don't think gold was ever over $700/oz until now. But, I remember reading that during the recession of 2001 when the average person lost something like 10% of the value of their portfolio, billionaires suffered, too: they gained only 2%. So, I assume that the wealthy investors almost always do well. They may be putting their money aside with the plan of riding out the storm. But, it's worth keeping in mind that very wealthy investors ($50 million+) sometimes work in timeframes of 50-100 years, so they think about the market in a very different way than the rest of us.
  6. BelichickFan

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    #24 Jersey

    I often think of moving mine to something conservative but I always end up being glad that I didn't. My 401K is all in the S&P 500 and I'm just leaving it there. I do have a few mutual funds in specific areas (health care, energy, precious metals). I guess I'll just leave them too. I'm not an expert by any means, I just know that history says it's best to let it ride.
  7. Chevy

    Chevy Rookie

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    Gold reached ~$850 in 79/80 .... http://goldprice.org/30-year-gold-price-history.html
    Last edited by a moderator: Aug 29, 2005
  8. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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  9. IcyPatriot

    IcyPatriot ------------- PatsFans.com Supporter

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    #87 Jersey

    Perhaps the Dow is sliding as an adjustment to the higher wages/less earnings factor once all the Mexicans have been sent home.:p


    Seriously...inflation is rampant when energy costs increase. So, the Fed raises the prime rate to stem inflation which is rampant due to a cost factor the Fed cannot control(energy).

    This double whammy has always bitten everyone...including those who get layed off when the rates go up as companies strive to keep profits up.

    Forget Republicans and Democrats... Greenspan is the one choking mainstream America...and the sadistic F# ck enjoys it like a Broadway Play.
  10. BelichickFan

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    #24 Jersey

    Not just energy. You get inflation when wages go up because it costs more to employ people and that's passed on to the consumer. We need to screw the working class more and slow the wage growth we've seen recently ;)
  11. PromisedLand

    PromisedLand Virtual Internet Person

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    The all time high for gold occurred on Friday, January 18, 1980 at $877 an ounce.

    http://www.investmentu.com/IUEL/2006/20060210.html
    Or they simply have a more conservative portfolio (*) - more in bonds, less in equities, using options and other hedging strategies to buy insurance against a market slide. That doesn't mean they didn't lose money in the precious metals market.

    (*) It seems plausible to me to surmise that it could be scientifically proven that the less well off one is, the more inclined one is to gamble or invest in high reward high risk securities. Billionaires don't buy lottery tickets, I wouldn't imagine.
    Last edited by a moderator: Aug 30, 2005

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