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stock market decline

September 15th, 2008 at 01:48 am

I just heard the stock markets going to tank tomorrow due to a Merrill Lynch buy out. Sigh. I'm still all in...only because I dont know anything else to do.

9 Responses to “stock market decline”

  1. baselle Says:
    1221440853

    Its (probably) going to tank because:
    Lehman Brothers will declare bankruptcy tomorrow.
    Merrill Lynch is going to be bought by Bank of America.

    The Asian and Europe markets will react to the news first.

    Its an historic time for an investor.

  2. gamecock43 Says:
    1221441439

    Historic time to be an investor?? That sounds bad. scary. veerrryyy scary.

  3. disneysteve Says:
    1221442674

    I don't know about the BoA deal. BoA is not into investment banking. That just isn't their field. Seems like a very odd fit to me. Plus, BoA is still digesting the Countrywide takeover. Very interesting times indeed.

  4. Broken Arrow Says:
    1221446045

    Last I read about it, BoA wasn't interested in any large acquisitions simply because it's still digesting Countrywide. So... yeah, this is news to me!

    Truth is, I'm out right now, but if it does go down, I just might go in! Big Grin So, thanks for letting me know of potential opportunity.

    ---

    Oh, and if it eases your mind, financials are only one section of our economy. And not every bank out there played Russian Roulette with sub-prime mortgages.

    If you're properly diversified, there's really nothing to worry about, and in fact, this is a great time to dollar-cost-average in your contributions in my opinion....

    That said, baselle has a good point. I'm interested to see how the Asian markets react, as well as the futures on Monday. But like I said, I see this as more of a possible buying opportunity than a time to be worried.

  5. merch Says:
    1221449585

    Steve Bank of America used to have a primary broker arm and they used to be pretty big in tech in the 90's.

    That got out of it in late 2007 because of bad mortgage investments. They went from 1.4 billion to 100 million in one quarter. They acquired Columbia management which had Acorn funds, Nations Funds and some old Bank of Boston funds. They have over 420 billion in assets across 90 funds, Columbia that is.

    source: http://www.nytimes.com/2008/01/16/business/16invest.html

  6. merch Says:
    1221450314

    Gamecock,

    Keep a diversified portfolio and rebalance once a year. For those keeping score at home, I started a position in the banking sector in March and am adding to it.

    I have also been building a position in REITs and will be moving into brokers once the dust settles.

    My advice is to use this to truly access your risk tolerance. There is one of 2 things: you need to educate yourself to get more comfortable with the risk or look for safer investments. I don't mean that as a put down.

    The answer is a truly diversified portfolio across multiple industries, sizes of companies, countries, and asset classes (bonds, stock, notes, etc,) will help you weather the storm. The other piece is to reallocate your portfolio. In other words, if you feel comfortable with 5% in emerging markets, and all of a sudden emerging markets go through the roof. You could end the year with 8% emerging market exposure, which is more risk in emerging market then you felt comfortable with.

  7. merch Says:
    1221450634

    ba

    NEW YORK (Reuters) - U.S. stock futures and the dollar sank late on Sunday as the first official trades of a new business week took place while talks to sell Lehman Brothers faltered, shaking confidence and pushing dollar-exposed investors towards safe haven U.S. Treasuries.
    (Advertisement)

    U.S. Treasury yields fell sharply in early Asian trade on Monday and Eurodollars surged as concerns about the stability of the U.S. financial system sparked talk of emergency liquidity measures by the Federal Reserve or even a cut in interest rates.

    Two-year Treasury notes jumped 20/32 in price, driving yields down to a five-month low of 1.90 percent, from 2.22 percent late in New York on Friday while yields on 10-year notes dropped to 3.56 percent, from 3.72 percent.

    U.S. stock index futures pared earlier falls in New York late Sunday, but still pointed to a steep drop when trading begins on Monday, with S&P 500 futures down 28 points and the Dow Jones industrial average futures off 211 points and Nasdaq 100 futures 31 points softer by 2330 GMT (12:30 p.m. British time).

    Source: http://uk.news.yahoo.com/rtrs/20080914/tbs-uk-markets-global-7318940.html

  8. Broken Arrow Says:
    1221453254

    Good! Sounds good to me. The financial sector isn't dead. It's just weeding out the weak who got too greedy. I am fully hoping for near-panic tomorrow. I wanna buy in as low as I can get my grubby hands on.

    Thanks merch!

  9. gamecock43 Says:
    1221487559

    all your comments and advice has woke up many questions in me. I guess I worry because I dont know much about anything thats going on. Look for questions coming in the future. And Merch- I didnt see it as a put down- I have low risk tolerance. Lower risk tolerance than I thought I would have.

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