Timing is everything in this life. And around the same time last year, I would say about May of 2009 I was about ready to retrieve 5 figures I had saved up from hustling as youngster out of a bunch of mutual funds & CD’s I had accumulated over the years. Six months prior than this I had been researching on finances, economics, and the basics of the wall street scene. I had fixed myself up with a practice account on a then popular stock trading site. I watched week after week of the stocks dropping admist what was then deemed the worst part of the so called recession. One of my favorite economist had predicted that the U.S. economy would collapse in feb. of that year. I guess Obama had other plans, since my accounts had matured, I took all of the money I originally invested made some small investments with them and put it in a new savings account and took the interest aquired immediately into a trading account. I started looking at all of the possible tech stocks, and decided to invest in amazon,inc, google, and microsoft. Two to Four months later two of those companies stocks increased over 200%+. Giving me one of my first real come-ups with the most recent technology stock boom since the early 2000’s. The only regret I had was not investing all of my life savings.
Stocks dive, Dow off 376 on world economic worries
NEW YORK (AP) — “Stocks took their deepest plunge in more than a year Thursday as fears grew that Europe’s debt crisis could spread around the world and undermine the U.S. economic recovery. The possibility has been brewing for weeks, but analysts said some investors are just waking up to it.
The Dow Jones industrial average fell 376 points, its biggest point drop since February 2009. All the major indexes were down well over 3 percent and are now showing losses for 2010. Interest rates fell sharply in the Treasury market as investors once again sought the safety of U.S. government debt.The number of people applying for unemployment benefits last week rose unexpectedly and the Greek government’s response to its debt crisis sparked new protests in Athens, but analysts said neither event appeared to set off Thursday’s selling.They said more investors seemed to be grasping the possibility that the U.S. recovery could be in jeopardy, and that many were realizing that the stock market’s big rebound since March 2009 may not have been justified.
“The economic recovery story has started to look like a mirage,” said Tom Samuels, manager of the Palantir Fund in Houston. “If that’s correct, stock prices are well ahead of economic reality.”Investors are concerned that the debt problems in countries like Greece and Portugal will spill over to other countries in Europe, cause a cascade of losses for big banks and in turn halt economic recovery in the U.S. and elsewhere.”It’s starting to look like one of these tragic stories were one person falls through the ice, then everyone else rushes in to help and ends up drowning,” independent market analyst Edward Yardeni said.They’re also worried that China might take steps that will limit its economic growth, which would also affect the U.S. recovery. Analysts said the market is vulnerable to rumors about any of the major economies right now.
The Standard & Poor’s 500 was down almost 12 percent from its closing high for the year, which was reached April 23. Most analysts consider a drop of more than 10 percent from a recent high to be a “correction.” This is the market’s first correction since stock indexes hit a 12-year low in March last year. The fact it has occurred in just 19 trading days shows how anxious traders are right now.The Chicago Board Options Exchange’s Volatility Index — known as the market’s fear gauge — leaped almost 30 percent to its highest level since March 2009. The increase in the VIX signals that traders are bracing for more drops in the market.The VIX closed at 45.79, nearly three times its 2010 low of 15.73, reached April 20. But it’s about half of the record high of 89 it reached in October 2008 at the height of the financial crisis.Analysts said traders were retreating from any investment thought to be too dangerous to own right now. That has meant heavy selling in stocks, commodities and troubled currencies like the euro.
The Dow has fallen 1,137 points, or 10.2 percent, since hitting its 2010 high April 26. It has fallen by at least 100 points in nine of the 19 trading days since its peak.The Dow fell 376.36, or 3.6 percent, to 10,068.01. The S&P 500 fell 43.46, or 3.9 percent, to 1,071.59. The drop was the worst for the Dow since February 2009, and the S&P’s worst since April 2009.All of the 30 Dow stocks fell, while 497 of the 500 S&P stocks closed lower.The Nasdaq composite index fell 94.36, or 4.1 percent, to 2,204.01, its largest percentage drop since February.At the New York Stock Exchange, only 153 stocks rose compared with 2,994 that fell. Volume came to a heavy 2.1 billion shares.Bank of America Corp. had the biggest percentage drop in the Dow. It fell $3.25, or 6.3 percent, to $15.28. Sears Holdings Corp. had the worst percentage drop in the S&P 500, falling $10.86, or 10.9 percent, to $88.70 after reporting first-quarter earnings.
The dour market got some confirmation from a Federal Reserve official that Europe’s problems could be a “potentially serious setback.” Fed Gov. Daniel Tarullo said that if the debt crisis curbed lending and the flow of credit globally, that would endanger both the U.S. and global recoveries.
“Although we view such a development as unlikely, the swoon in global financial markets earlier this month suggests it is not out of the question,” he said in prepared remarks.””There’s a question out there now that potentially we could be talking about a collapse of the eurozone or countries breaking away from the euro,” said Tim Quinlan, an economist at Wells Fargo & Co. As recently as four months ago, that wasn’t even considered to be a possibility, he said.Such a stark change in views has unnerved investors, but analysts said they weren’t seeing signs that fear is sweeping the market.”These are not panic losses,” said Todd Colvin, a vice president at MF Global Inc. in Chicago. “These guys are taking some profits off the table and taking some capital where they know it will be safe. And where’s that? That’s cash or even Treasurys.”
High unemployment remains one of the biggest obstacles to a sustained recovery in the U.S., and concerns about it grew when the Labor Department said new claims for unemployment benefits rose by 25,000 to 471,000, their largest amount in three monthsThat came as an unpleasant surprise to investors who were expecting a slight drop. The latest report snapped a streak of four straight weekly drops and questioned the strength of the job market.Greek workers, meanwhile, again took to the streets protesting recently approved budget cuts that were necessary for the country to receive a bailout. Greece was able to repay debt that came due Wednesday only because it had access to a rescue package from the European Union and International Monetary Fund.”
One of the first lessons I learned on Wallstreet is that it’s an high volatile and emotional sector, and is not for the faint of heart. The news article above I sense great panic, as a mater of fact quite similar to the articles I was reading same time last year. So will you just sit back and watch, or will you man up and seize the oppurtunity?