Comments on: History Of The Stock Market

By: Four Pillars Investing

Four Pillars Investing — Sat, 10 Jan 2009 09:02:13 +0000

[...] guest post I did a while ago called Know the history of the stock markets. I wrote this when the market was still crashing but it still [...]

By: Becky

Becky — Mon, 27 Oct 2008 04:10:16 +0000

I couldn't agree with you more. I don't think that it would be good for people to stop investing all together, however I think that people should do their homework and make sure that the things they are investing in are safe- great advice I received by reading Jose Roncal and Jose Abbo's newest book, "The Big Gamble."

By: Fall Wedding Roundup 10-26-08

Fall Wedding Roundup 10-26-08 — Sun, 26 Oct 2008 15:02:57 +0000

[...] A history of stock market downturns over at Frugal Dad, guest-posted by ABCsofInvesting. [...]

By: natakala praveenkumar

natakala praveenkumar — Sun, 26 Oct 2008 07:54:38 +0000

I THINK THAT MARKET WILL SLASH DOWN FURTHER OF THREE MONTHS BECAUSE OF INTERNAL ,EXTERNAL ELECTIONS & DUE TO X-MAS SELIBRATIONS OF ALL OVER THE WORLD.
HENSE GIVE YOUR COMMENT ON THIS
email:n.praveenkumar802@yahoo.co.in

By: almost there

almost there — Sat, 25 Oct 2008 01:31:31 +0000

I purchased an energy mutual fund $2 below its lifetime peak this summer after watching it all year. Down it went, worth well less than half of what I purchased it for. Never fear. If it goes down a little more I will buy more shares. I feel that energy will go up as China and India are demanding more by the day.

By: marci

marci — Fri, 24 Oct 2008 22:12:28 +0000

7500 will be the magic number for me… If it hits that, then I’ll go crazy buying stuff
Huge sale

I’ve already bought some, and upped the 401K, and am looking at what to buy next. My conservative stuff just hasn’t dropped much tho.

By: Squeaky

Squeaky — Fri, 24 Oct 2008 19:40:38 +0000

The original purpose of a stock market (and this was in the very distant past) was to enable business owners to buy, sell, and trade “stock” in shipping expeditions or other business ventures. People started to do this in Europe around the end of the Middle Ages, although there’s evidence to suggest that organized share based investment occurred in ancient China and Babylon as well. Participation in this kind of investment was by definition limited to wealthy insiders who knew and trusted each other, because there wasn’t much regulation. Anyone who invested in a venture was responsible for finding out about the risks and understanding them. Similarly, they took it upon themselves to learn not only about the business venture being proposed but also about the people involved and their level of honesty and reliability. That didn’t always work, because then (as now) not everybody who sold shares in a business was honest. Unsophisticated or poorly connected investors did exist, but they tended to not last very long.

Later on, more formal brokering arrangements became common simply because the demand for them grew. The “market” became too big for person-to-person transactions, and so brokerage became a legitimate business. Unfortunately, the rise of brokerage as an industry enabled investors to become less personally sophisticated and less directly involved with their investments. That trend continued, and even accelerated, into the 20th and 21st centuries. In recent years, particularly in the USA, the majority of the regulatory laws that affect the stock market, investment, and brokerage industries have been designed to make it easier and more practical for an unsophisticated investor to buy and sell shares in companies they know nothing about.

I am probably alone in thinking that this is a bad idea, and that the best way to invest money is in something that the investor can understand and control. Examples may include a small business, a farm, or income producing land or real estate. If an investor takes the time and trouble to research each stock and the management team of the company before buying shares in it, and to educate himself or herself well enough to understand the risks and the rewards, there’s no reason why a person’s chosen area couldn’t be the stock market. Yet I’m not seeing why the market should somehow be considered a suitable place for “everyone” to invest.

By: Meg

Meg — Fri, 24 Oct 2008 19:04:25 +0000

This makes a really nice contrast to the media which tends to extremes to generate sales.
And I was just wondering about past market activity but didn’t have the time to research it.

By: DavidK

DavidK — Fri, 24 Oct 2008 16:58:47 +0000

Well, something happened. It looks like the comments page reverted to an earlier set of comments as I had added a comment along with the two that were there already.

Anyway, my post was about using http://www.djindexes.com to look at how the stock market is doing. If you look at the 10y trend, it does appear that the market had gotten somewhat inflated and is currently adjusting itself once again. Looking back at late-1999 and late-2002/early-2003, we can see that the market is actually at the same place it was back then. It also picked up shortly after that. Of course, if we listen to the Chicken Littles out there, then the market still has a ways to fall. Depends on whom you listen to: pundits or history itself.

By: Frugal Dad

Frugal Dad — Fri, 24 Oct 2008 16:48:14 +0000

@DavidK: I’ve only seen the one from Writer’s Coin. I don’t censor comments (unless they are just downright profane, and even then I just edit out words).