2008: Lost Cause for Stocks. What Will 2009 Bring?
By now, it is pretty clear that 2008 is a lost cause for stocks. They are down overall, and chances are that the stocks you have in your investment portfolio have lost in value. And, while that doesn’t mean that you should dump all of your stocks (remember: it’s only a loss if you liquidate), it does mean that you might be a little worried about where the stock market is headed in 2009.
The answer to that question may be seen in the first five days of stock trading in 2009. Flexo at Consumerism Commentary points this out about the stock market:
Over the last 36 years whose first five days resulted in a stock market increase, 31 of those years experienced an overall good year for stocks. …
This method has an 86% success ratio.
Now, obviously, on the stock market, past performance is not always an indicator of future results. And even this indicator is not infallible. But it does offer something to think about. And, depending on how well the stock market does in the first five sessions of 2009 (Friday this week and Monday through Thursday next week), could set the tone for the entire year.
Opportunities no matter how the stock market goes
The savvy investor will find opportunities to make money, no matter what happens on the stock market. Indeed, for bargain hunters, the last few months have presented great chances to get good deals on a number of normally-expensive value stocks. If 2009 ends up like 2008, the savvy investor will diversify a bit (adding some safer investments) while continuing to buy up some of bargains stocks so that more money can be made with the stock market recovers in earnest.
If 2009 turns out to be good, those who bought when the bargains were at their finest will find that their investment portfolios are gaining in value. And that 2009 might be a good time to do a little controlled selling.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
