Stock market crash 2011
Friday, 23 of September 2011
Yesterday wild swing caused many concerns among investors.
A lot of investors are feeling the pressure as the market plunged hysterically to a bothersome possibility that we might be heading for another recession. Or as we might call it: the Stock market crash 2011 .
Who can forget the last recession (stock market crash 2008)? We all have it engrave deep inside our brains; the depressing thought of being battered day after day, until fear becomes unbearable, and capitulation seems like the only solution; when markets are hit so severely, that it seems to be living on life support. Yes, the 2008 recession still leaves consequences of its meltdown as another one seems close behind.
The question on everyone minds being: is this the first of a series of daily downfalls that will eventually lead to a double dip?
How many more of these daily violent market swings are you able to tolerate?
My take on this malicious market ride, is that, unfortunately! Stocks have not bottomed out yet!
And you should anticipate more decline as we get closer to finding out what is going to happen with the Europe dept crisis.
If You can’t take it anymore, and you find yourself in total despair! You will need to inhale another breath of falling hope, cause it’s not going to stop until we see some type of global action from governments around the world.
To my opinion, we are heading towards a serious down trend, and if your intentions are to invest during these volatile dips, you should not forget to protect yourself by using stops. And if you are bold enough to be buying in such turmoil markets, be wise and purchase stock in increments. This means instead of buying 100 shares at once, buy, 20 then 35, and 45 shares at an interval of 3 to 5 % drop at each time. This strategy will give you a much better average price and will enable you to take advantage of buying options (covered calls) when the market starts to move back in positive grounds. Furthermore, remember to invest in good reputable companies with high dividend. Always remember; when markets falls, dividends rises! In this type of market calamity, you need to take advantage of the fact that yields give better return and are less risky.
So! Is it too late? Or do we still have a slight chance of avoiding another recession?
Let’s compare today’s situations and the 2008 financial crisis, when greed overcame our banking systems and triggered a global meltdown!
If you take a good look, you can effectively sort out some huge differences between both crises.
First, the 2008 recession, was a liquidity crisis. The financial, banking and credit system was heavily hindered. Trust in the banking system had vanished, and credit was just unavailable.
The 2011 crisis is totally different, today’s banking system is still lingering the backlash effect of its previous recession, but credit is more accessible and easy to come by. Banks are lending at a very much lower rate which facilitates business and commerce to borrow.
So business wise, things are going OK!. The problem is political. Our governments are struggling between saving the economy (dept) and creating jobs.
The difficulty that might come ahead (market crash 2011) , is Ben Bernanke ( fed chairman) is out of munitions, and stimulus equal printing money, which eventually will sink the country even deeper in dept. And citizen are outrages about the ineptitude of our political leaders. In other words, their inability of handling the dept and unemployment issues.
I believe, the underlying problem of the 2011 crisis, is a psychological battle between politician’s legislative worksheets. It’s a global situation which needs immediate attention. This means, if government leaders around the world, would stop wasting time arguing about who is right or wrong, and concentrate their efforts at resolving the mess they have brought us in, we just might avoid it all together. This is effectively a global managing problem, and all will depend on how our leader will react to this situation.
It’s not too late! We need to see immediate action from Europe leaders. They and other country’s politicians must come together as a collective group and resolve their dept issues.
We need to see our own politicians establishing legislative regulations and concentrate on lowering the rate of unemployment in the united states. We need to see Democrat’s and Republican, working together to solve these issues, instead of concentrating all their energies on the next presidential election.
I would normally say, so the game plan for the next couple of weeks, will be…. Well! Actually, this is far from being a game. This is the survival of the ones how managed to keep money on the side for moments just like this.
The idea is to be patient, and if you can, avoid investing in this market all together, that is, until European leader decides to take action and creatively produce legislative regulations to take care of Greece once and for all.
Let’s all hope we can avoid the market crash 2011, and finally see our leaders making diligent and useful changes instead of the usual procrastinations!