CRASHING

 STOCK MARKET CRASH part two

Be sure you read Monday's entry before this one.

So the country pulled back during the Christmas season of 2008.  Everyone could feel the pinch of the stock market falling so badly.  The end-of-year number of $903 for the S&P 500, a little higher than November, made everyone feel, or hope, the falling of the market was over.  It couldn't get any worse.

Well, it did.  January closed down again; it was at $828.  February was even worse; it had a closing at $735.  That was it's lowest point the market reached.  It was devistating.  You were lucky if you only lost 40% of your money if you rode it out.

We kept putting money into our 401k's the whole time.  One positive was that you were buying stock at the lower prices.  People who were able to pull their money out of stocks early in the decline were lucky.  Well, they were lucky if they could guess when the right time was to put money back in the market.  

Most stock advisors stuck to their line about riding out during the down times because the market always comes back.  Many were wondering if it ever would.  

The market did come back - but surely, not as quickly as it went down.  The S&P 500 didn't reach those 2007 levels until March of 2013.  That's a long time spinning your wheels.  That only brought you back to where you were.  What about all you failed to gain in those five years?  Who got my money?

Deversification is the word.  Don't put all your candy in one bucket; your brother or sisters could too easily grab it.