Stock Markets Exposed

How does the US stock market follow a depression? What types of stock go up and what types of stock go down?

Public Comments

1. during a depression all the stocks go down. No stocks go up. The drop in stock prices would astound you. 1974 was not even a depression, just Jimmy Carter doing his thing. The average pe ratio was about 6. Do your math. During the 1930-39 depression stocks lost about 90% of their value at the peak of 1929. Growth stocks would be hit the hardest. Their 30 to 40 pe ratios would drop to about 6 to 8. Add that to the drop in their profits of about 90% and you have the recipe for a really big fall in prices. Maybe Cambell Soup would not drop over about 70% or so in price. It would be one of the more stable stocks.
2. The easiest way to make money when the stock market goes down is to "short-sell" stocks. This means you make money when the stock goes down, and lose money when it goes up. there are mutual funds that specialize in short trades: GRZZX. Gold, GLD, is sometimes a good investment in difficult financial times. Here is an entire portfolio of stocks that would do well when the overall market declines: http://www.top10traders.com/ViewPortfolio.aspx?userID=14 This portfolio is from http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. There is also a charting feature , so you can see how your portfolio performs compared to the S&P 500. Here are this month's best traders: http://www.top10traders.com/Top10Standings.aspx Hope this helps.