Dow Jones Stocks Today
Investment: Dow falls 2700 points
It is a title that all the fears of investors in the stock market is going to happen. The collapse of the market and your savings hard-earned evaporates. They are forced to return to work and have to resort to eating beans and rice. Is the fear justified? No.
Stock markets around the world fell on Tuesday. The response of the media was the biggest one-day drop since September 11, 2001. Chinese stocks plunged nearly 10%. Here in the U.S. the major indexes fell more than 3%. At one point the Dow Jones Industrial Average fell over 150 points in a minute!
If investors panic? No, the world does not end. Saving the world remain strong and growing. Interest rates remain low by historical standards. And yesterday decline following seven months, the markets recorded increases of 15%, 25%, 40% and up to 77%.
First, Let yesterday in a proper perspective. I remember the flag in 1987 when the stock market has fallen. This is something I will never forget and is one of the reasons why the developed systems and strategies they use to manage my money customers today.
Tuesday, the Dow Jones Industrial East has fallen by just over 400 points. To match the market fell in 1987, the total decrease Tuesday is 2700 points. On Tuesday, the Dow dropped 3%. In 1987, fell 20%!
Secondly, there are times when markets make adjustments quickly. She true not only for equity markets, but bond markets and real estate as well. The introduction of electronic commerce and the proliferation of coverage funds should not add to volatility.
That may be what happened yesterday. Hedge funds can be used both as 30:1. This means that if they a dollar, borrow more than thirty dollars and invest it. If the emergence of markets, a hedge fund can make enormous profits. If you drink too many markets, then receives a margin call. "Then they that lent money decide they want it again – immediately.
When trading on margin someone receives a margin call, most often have to sell Investments to generate cash to cover the call. When you're leveraged 30:1, meaning that they have they sell a lot of investment. Hundreds of millions of dollars can be sold in minutes with the use of electronic commerce. That the sale in the market causes down causing others to receive margin calls. So then you have to sell.
Many mutual fund managers today have not experienced a decline, as 1987 or 2001. Initially, they hang there. But as the bear market again, succumb to the fear and decide to start dumping investments. In my opinion, is why has accelerated the sale late Tuesday.
Which brings me to my second point. Who's watching your money? When things go wrong, can go wrong in a hurry. So it is so important you know that someone is following closely your money and take the necessary steps to protect it.
Unlike the majority of managers, I use multiple strategies for each account. Some are short term, some medium and some long term. Days like yesterday, illustrating the benefits of this multi-strategies. The money in the short term strategies rapidly shifted money. Some sales have held the day before the big fall. Others took place shortly after starting. If 25% of an account quickly moved to cash in these cases, reduced overall portfolio risk substantially.
Thirdly, is important that they are selective in what you sell. The sell-off in the short term you can make high pay dividends and other investments to be comfortably storm. Even if the market is languishing, like strategies that pay dividends of 6-9%.
Finally, after the market close yesterday I saw a picture of a soldier American with an Iraqi child died needlessly. I spoke with a customer who has been subjected to additional tests to check for cancer.
Therefore, I have duty to supervise and manage my client's money and save your work, your savings, it is important to remember the end, there are things in life that are far more important than money.
About the Author
Nationally-syndicated financial columnist and Certified Financial Planner Jeffrey Voudrie provides personal, in-depth money management services and advice to select private clients throughout the USA. He will answer your financial question FREE. at http://www.guardingyourwealth.com
6/24/09 Dow Jones Stocks: SELL 53% or 16, HOLD 20% or 6, BUY 27% or 8 of 30 stocks