More Money Blog

The stock market seems to be getting beat down just about every day now. The Dow Jones Industrial Average is now below 7,000 with a close at 6,763 on Monday. This is the lowest the stock market has been since 1997! Truly incredible.

The scary part is that the market has broken almost all of its technical supports and it seems as if it could just continue to bleed and bleed every day. Another very troubling aspect of this market is that there has been no substantial rally since the crisis started. The government has thrown pretty much everything and the kitchen sink at the economy and the rate of decline in the market hasn’t even budgeted. 

I know this all sounds like doom and gloom, but remember that the market has never not come back from a downturn in the economy, even after the Great Depression. Also remember that investing near the bottom of a recession is an extremely good idea for long term investing. If you plan on putting money back into this market, you need to be extremely careful and understand that the market could still possibly drop 50%+ from here.

Update: After writing this article and listening to a number of news stations today, it seems as if almost every single person out there is very bearish on the stock market. One thing that I have learned over the years is that the markets often do the opposite of what most people think will happen. So it will be interesting to see where the markets go in the next few days. Again though, if you plan on putting some money in this market, keep it light.