Stock Markets Exposed

Is it normal for the US stock market to be dropping this much?

I've only been following the US stock market for about half a year, but I've seen the Dow plummet a few times, including 300+ points in one day, at least twice. Is it normal for the market to be going through such volatile cycles, or is it, added with the sub-prime lending mess, the falling dollar, etc. a reason for concern?

Public Comments

1. The market tends to correct violently. Check out the Dow and S&P in 1987 and this won't seem so bad. This correction is actually a good thing for most younger investors. When prices are driven down dramatically, the chance for good long term returns are more likely.
2. Think about it, 300 points is around 2.5%..... On "Black Monday", the Dow dropped more than ten times that percentage! If you had invested $1000 the day BEFORE Black Monday (so its value dropped to $700 and change the next day), but you were smart enough to leave it alone and not panic, today it would be worth more than eight times as much!
3. Considering that the folks in Washington have not got a clue, there is reason for concern. But as your 1st responder mentioned, it might be a buying opportunity. But then again it might not. This might very well be the beginning of the next great depression.
4. Completely normal. Most of the movement up and down in the market occurs on less than 10% of the trading days. Most of the time nothing much happens...
5. Beginner traders often fantasize or wonder about how some people are able to achieve tremendous profits by trading stocks just a few hours on a daily or weekly basis. So going beyond the hype & the bells and whistles that a lot of the so called "trading gurus" like to invoke, the real "secrets" of the stock market game are enclosed within the trading set ups and market signals you rely on to decide how to CHOOSE stocks, as well as WHEN to BUY & when to SELL them, or even when to SHORT SELL those that are poised for a profitable fall. So the clearer your set ups are, the faster you can spot a potentially profitable trading scenario and ACT ON IT reducing your risk. Fortunately some sites on the web do offer more effective and updated day trading methodologies. One of those sites that can show you how to take advantage of certain stocks on positive and negative momentum as well is http://www.MomentumStockPick.com They focus on momentum stock trading strategies, that are practical and easier to apply than many other technical systems out there. Learn to Pick Good Stocks in a Down Market