Have you ever watched Deal or No Deal? If so, how frustrated do you get when the contestant is offered a really good amount from the banker and then the contestant goes on to play against the odds and ends up with a measly ten bucks?
Watching the show it’s easy to think, gee, this person is an idiot. But how different is that from playing the stock market?
Of course, stocks have a lot more math to them. The odds aren’t so clear cut. Each company has its own risks and it’s own potential for success.
But when it comes down to it, you either believe in a company or you don’t. You believe that in box #1 there is a goldmine and you stick to your gut or you change your mind and hope you’re right.
Obviously you can’t control the stock market, but I never realized just how vulnerable it (and the American dollar) was until recently with this huge recession going on.
I can’t figure out if my stock investments are bad choices or if the recession will just have to work through my piggy bank before my stocks can start growing, and hopefully returning to their investment value and exceeding it. Still, I have my doubts I’ll see that money again.
As I’ve said earlier, my Sharebuilder account is where I can play the stock market for the long term. I’m not day trading… which maybe is a bad thing, given the recent performance of my GLD holding. It was up to over $100 a share just a day ago and now it’s down to $93 a share. My $49 profit has widdled away to $6, and I wouldn’t be surprised if it goes negative soon either.
Meanwhile, all of my other funds are performing miserably. One of the other reasons I started my Sharebuilder account is to diversify my portfolio internationally. I’ve got random bits of stock in Brazil, India and the rest of Asia (coal and cleantech stocks) — all ETFs. I’m hoping that if the US crashes and burns maybe these other economies will survive and even grow. I believe that the future for the US economy may not be so bright. China and Asia are gaining power by the millisecond. I can’t imagine that the US will be able to keep up. I think over the next century the US is going to lose some of its superpowers, for better or worse. I believe there’s going to be a big war at some point down the road that’s going to hit all of the world’s economies much worse than the Iraq war. There will probably be more attacks on America, and there will be a third world war. I just don’t see how it’s possible to avoid it. Scary, but I think it’s probably true.
Of course war times, historically, are usually good for the economy, right? Well, except this Iraq war doesn’t seem to be living up to that. So I don’t know. I can’t really guess the future, but the way the world is right now, and the way people are so stupid and stubborn and violent, I can’t see us avoiding some huge conflict for much longer.
I’m not sure how that will effect my stocks. If I survive through such a war… maybe a diversified portfolio will be a good thing to have?