The market seems to be selling-off on the back of limited bad news imo, apart from the dollar that is.

If you can hold your nerve and apart from any short term requirements to offload poor performing stocks, I have a couple!!, my advice would be sit tight. This does not have the feel of the tech(mining!) bubble at all. Difference being there are a lot of good fundamentals, unlike in 2000 when there were a lot of over rated nothing companies.

Over long periods it will average out better than cash. But if you made say 250% in equities over 3 years (during a boom), then 5% in cash over the next four (during a downturrn), I think your overall average in and out of the market will still be higher. All down to timing and how you do the maths I suppose. You also have a fairly constant "cash value", where as in the markets you may have stellar returns for 3 years, negative returns for 4 years, average out OK, but be restricted as to where and when you can access your "pot".

My investment stratergy has always revolved around being in the markets when interest rates are very low (because it stimulates growth, which should be good for companies/spending) and out when rates are high (relatively speaking, because it constrains growth/spending). At the moment I think rates are high when you consider the levels of debt, and I suspect continued inflation, particularly in commodities.

I'm sure I read something by Schwartz (the market historian) who was saying that recent history is actually showing negative returns in the markets. If you invested at the peak of the tech bubble, I guess you'd still be averaging a negative return, even worse when inflation is factored in.

Strawbs.

I feel sure that many people are playing this current bounce & will take profits soon. BoE rate review thurs. My money is on another bounce down towards the end of the week.

A big step back at some point today cynic (the dow), that's the problem (i bought it before hours and closed it again) ,where do you put your stop,,now knowing my luck it will be a smooth ride up.

pure gut feel ...... i bought at 12258, being just about on a support line and held my breath ..... once i was decently in profit, i put in a trailing stop at 12275 and then 12295 and finally, about 30 mins before the bell at 12335 ..... this got hit, but then of course the market strated on its upward track once more ...... btw, i don't actually (usually) day-trade though this happened to work out that way ..... a decent profit is exactly that and is easily frittered away.

today
i suppose a brave call is short ..... but i haven't done it!

Lets see ,, i think long ,maybe a big leg back during the session , but a close above 13500 ,i'll be going long if it drops 50/60 pts .

Your shorts looking good as i write cynic ,,i didn't go long when it took a step back ,far to volatile for me, +20 to -50 in about 10 minutes i think.

i didn't do anything either .... far too scary though as it happens short was the correct call if you could have held your nerve

Summary of quote:

"The gains in the U.S. were erased after American Home Mortgage, provider of loans to borrowers without top-rated credit, said $450 million to $500 million of loans probably won't get funded.

Oil's climb to a one-year high above $78 a barrel drove the retreat.

Financial shares also turned lower after investor Jeremy Grantham said up to half of all hedge funds may close in the next five years.

American Home Mortgage plummeted $9.43, or 90%, to $1.04. The lender, whose shares stopped trading at $10.47 yesterday after it disclosed a cash shortage, has been cut off from credit and didn't have money yesterday to make $300 million of mortgages it had already agreed to provide, the Melville, New York-based company said today in a statement."

On top of that, Apple has said it's iPhone is not selling well!

It doesn't seem to take much these days to send the indexes into a spin.

AFX: AHM on verge on bankruptcy

Edited........ I should've read the article all the way through, thought they where a non subprime lender, but sounds like Alt-A is similar if not necessarily the same.... :-)

Strawbs.

I heard word that there will be yet another US sub-prime lender going to the wall this week, albeit for a relatively small $800 million. If true will not help sentiment uch.

This whole sell off business has been caused by the greed of the banks increasing the interest rates. So there is one answer to the problem. Get back to stable low interest rates.

absolute rubbish!

1) markets have been going up, with some corrections en route, for a long time and this cannot last for ever.
2) the sub-prime lending problem in US is potentially very serious especially if some of the hedge funds start to feel the heat and at best have to start unloading stocks, or at worst, fold
3) the latest sub-prime lender in trouble, as reported late yesterday, is seemingly no tiddler

how can you then be surprised that the markets catch fright?

how far and for how long they will fall is currently anyone's guess, though chartists will tell you that Dow could easily fall another 250 points (12750) and quite possibly 1100 points (12000).

old and tried and tested adage says that when Wall Street sneezes, the rest of the world catches a cold.

Looks like another 'down' day for the DOW.
Are you shorting the index, cynic?
jimmyB was right about a big step back yesterday, but it's getting more & more difficult to predict, imo.

Harry ..... go to TA thread and all will be revealed! .... in fact i closed at a very tasty profit at about 08:30 this morning .... could have done better, but hardly griping ..... Dow opening now showing almost neutral having been forecast earlier as much as 120 points down since last night

O.K. Thanks.
Am going to sit on my hands this afternoon, so that I am not tempted to push any buttons! Much too difficult to call, imo.

Cynic is one of the herd and have heard only the official line which continues to be regurgitated to create volatility in the markets. Without volatility the financial sectors would not 'make' fantastic salaries, so it is to their benefit to create uncertainty through the official announcements. So what if a few hedge funds with super-high-risk strategies go under for a few $100M. The market has just taken $90billion out of circulation. Surely the immense global banking system can get these 'get rich quick merchants' with virtual assets under control. Taiwan has just started a review to find out if the local market will be affected by US sub-prime lending problems - they just don't know.

Interest rates were increased 5 times in UK to address the so called rising inflation indexes. However the UK government can reduce inflation at a stroke by reducing stealth and windfall taxes in all sectors. This includes all regulatory payments introduced into every aspect of British life to pay for over-government and vast armies of civil servants which (in their own words) are not fit for purpose.

Is this a real crash coming or another 'wave' to ride? The financial gurus better get to grips with these situations before we have a tsunami.

sorry alan, but you really do talk a load of total and utter bollocks, and that is even when compared to me!

Is this a real crash coming or another 'wave' to ride?
can't tell, but history shows that these violent daily swings tend to mean very sharp correction at the very least

The financial gurus better get to grips with these situations before we have a tsunami.
nothing economists or the banks can do to stop these wild gyrations and/or sharp corrections or even somewhat or something worse ...... it is sentiment, as you should know if you have ever seen either a bull or a bear market in action, and seen how the markets react to good or bad news respectively

Blimey, what an absolute pile of crap!

It's a long time since I've seen anyone with such little knowledge about what's going on economically in the world as Mr alanatml2. Historically, with the inflation indices as high as they are, interest rates should probably be in excess of 7%. Think yourself lucky the BoE have pussyfooted around! ............. or rahter wait and see how high they have to go to really tame the inflation tiger.

If the markets crash then they probably won't need to go much higher......
A financial meltdown is always a good way to knock consumer confidence. ;-)

Although speaking to friends over the last few weeks, I don't think there's many retail investors left in the markets this time. They seem to have learnt the lessons of recent crashes and cashed in early.......My pessimism obviously rubbed off... :-)

Strawbs.

NEW YORK (MarketWatch) -- U.S. stocks will fall next week, continuing a broad sell-off seen on Friday, as investors stay on high-alert for more bad news linked to dodgy home loans, credit woes, and their potential impact on the broad economy, analysts said.
"My expectations are that equities are in for another volatile week," said Mike Malone, trading analyst at Cowen & Co. "It's going to be difficult for equities to sustain any gains until the concerns in the credit markets begin to wane."
Investors will also anxiously await the meeting of the Federal Reserve on Tuesday to see whether central bankers signal growing concerns about credit markets.