This Whole Stock Market Thing Is a Wild Ride!

I've only been invested in the market since Tuesday and I'm already experiencing the ups and downs of being an investor, albeit on a micro scale. The first couple days saw the market bounce back from previous lows and I saw my balance magically increase by about $32. Not a bad deal, I thought. Then yesterday the S&P had a big drop and my balance actually dropped below my principal. I'm obsessively checking the market fluctuations even though I keep telling myself not to. Hopefully the novelty will wear off soon.

I'm actually happy about this and I sincerely hope the market continues to decline over the next few months. A bear market is a great thing for a young investor, and since I plan on putting a lot of my money in over the next few months I want to get as much as I can for my dollar.

So, here's to plummeting prices!

Who Profits from Big Oil?

Tired of rising gas prices? If you have a 401k plan, IRA, or invest in broad market stock funds, chances are that you, like millions of American investors, are reaping the benefits of gigantic oil company profits.

Learn to Love the Bear!

A great article by Jason Zweig in this weekend's Wall Street Journal. It's titled, "Stop Worrying, and Learn to Love the Bear." Zweig's main point is that bear markets provide the best investment opportunity for the prudent investor, and that wise investing, like losing weight, is simple, but not easy. It's boring and relies on consistent investment and discipline over decades - simply invest every month in low-cost index funds that track the market and a century of stock market data is on your side in terms of expected returns over the long term. Stay the course and ignore the market fluctuations - if anything, down markets represent the time when you should be putting more money into the market - stocks are on sale!

Reading this in addition to countless other articles and opinions reflecting this philosophy (one which men such as Bogle and Buffett espouse, especially for the average investor) just confirms what I've been feeling - I am actually excited to be beginning my investing career when stocks are at bargain basement prices. I will gladly watch the S&P continue to drop over the next few months!

The Lost Decade

An interesting article in the Wall Street Journal about what they call a Lost Decade in the US stock market. For the past nine years, the S&P 500 has returned a paltry 1.3% per year when adjusted for inflation, far below the historical average. It's a scary article, but there are a few positives in there. The optimistic outlook says that we are nearing the tail end of the bust decade, and that there are reasons to believe that the market will rebound.

Of course the pessimistic outlook is decidedly worse...