[Azred]

Originally posted by Timber Loftis: Azred- First, I admit I'm going into an [img]graemlins/offtopic.gif[/img] excursus. I'm no expert on this, believe me. But, I ask, why diversify when the market as a whole is tanking? Wouldn't that simply assure you that you get to rise and fall with the Dow (like my mutual funds are proving to do). Wouldn't you be better-served to watch individual stocks closely and pick them up a few at a time. Simply put, my understanding is that long-term market prospects are down, but daily fluctuation of the market and individual stocks is large enough to allow day-traders to still make a buck. Again, I'm no expert. Don't have $$$ or time to try it this way, though I will take note of expected good stock picks in preparation for the (hopefully sooner rather than later) day I can play the game.

I agree, it seems like if you wait for a stock price to hit a bottom you can buy it, then sell when the daily fluctuation in the price goes up. However, this is what causes investors to "lose their shirt", because no one, not even "experts" who have been trading stocks for 30 years, can predict the market. This is because the market's nature is counter-intuitive.
I don't know if you remember the "crash" back in 1987, in which many people lost a lot of money, but if you compared the Dow average on 1 January 1987 versus 31 December 1987 the market actually gained about 2%. The long-term nature of the stock market is positive growth. A proper diversification means that you can take advantage of this growth, regardless of which way the day-to-day averages turn.
The way to succeed is to pick a dollar amount, say $100 per month, and invest that amount every month, especially if the market is going down. [img]graemlins/saywhat.gif[/img] When the market is down your money buys more; when the market eventually rises your investment will skyrocket. Mathematically, I can prove that a stock price can fall 75% yet a monthly investor can turn a profit. You can't beat that with a stick! [img]graemlins/awesomework.gif[/img]
In short, pick a good mutual fund that is well-diversified and invest monthly.

This may have been really off-topic, but I can correct that. *ahem* The economy follows its own patterns and nature, regardless of which party is in power or the economic policies they institute. The Fed, which governs interest rates, have much more influence on the economy.

On to another of Iron Ranger's original topics: since Senators are in charge of American foreign policy, they should go to foreign countries more often to get a first-hand grasp of the situation. No, individual Senators do not have the authority to negotiate treaties, agreements, or accords, but more knowledge never hurt anyone. Were I a Senator, I would be travelling abroad as part of my responsibilities. Since I am over 30, perhaps I should run.... [img]graemlins/petard.gif[/img]