If you're like many investors in the U.S. Stock Market, you've watched the prices of your stocks fluctuate dramatically over the first part of May 2010. The big questions many Stock Market investors want to know are: why? and what should I do about my stock holdings and investments?
And if you've asked the Why question lately - you're not alone; the government also wants to know why the Stock Market took a dramatic downturn on May 6, 2010 and went so far as to conduct a financial services subcommittee hearing on the one-day Stock Market plunge. Some experts blame that one-day Stock Market plunge on a mixture of computerized sell-off and worries that the European debt crisis would spread to the U.S. (source: www.startribune.com/business/93075584.html)
As for concerns about what you should do about your stock holdings, the general consensus seems to be that it may be wise to hold your investments. However, the economy remains to be quizzical; according to the Star Tribune, the economy gained nearly 300,000 jobs in April, yet the unemployment rate reached nearly 10 percent. (source: www.startribune.com/business/93075584.html)
Stock Market and investing reports show decline
Investors are particularly challenged by the milieu of reports suggesting that the Stock Market is becoming increasingly less forgiving and generous with stock interest rates. Here are just a few notable reports all Stock Market investors may want to read:
"Interest rates plummet as investors seek safety"
"Gov't data show solid recovery but concerns remain"
"Gold slides from record high""Stocks tumble on worries about European growth"And, finally, a comparison of the current state of the Dow Jones Industrial Average to where it was 10 years ago (hint: it's the same)
General investing outlook shows growth
Despite the heavy reports and indications that the Stock Market may be declining and becoming increasingly less profitable for long-term investors, the outlook for 2010 shows a 3 percent growth, according to a Wells Fargo Securities report, "Fed Decision: Holding Steady as the Recovery Matures;"
Two interesting aspects appear in this recovery. First, gains in output are associated with productivity improvements and limited job increases. Second, adding capital equipment without labor suggests a rise in the capital/labor ratio. These two trends suggest increased returns to a smaller existing workforce but limited job opportunities for those without the right skills. (source: "Fed Decision: Holding Steady as the Recovery Matures")
So, as a small business owner or general Stock Market investor, what should you do to be smart with your money? Continue to read economic reports, follow your individual Stock Market investments, and identify some reliable financial advisors or Stock Market resources you can trust. Above all else, remember that investing in the Stock Market can be a gamble, and, like all gambling scenarios, you shouldn't risk any money you can't afford to lose.
Sources:
http://www.c-span.org/Watch/Media/2010/05/11/Economy/A/32793/House+Financial+Services+Subcommittee+Hearing+on+the+Stock+Market+Plunge.aspx
Stocks tumble on worries about European growth
http://www.startribune.com/business/93075584.html
http://finance.yahoo.com/news/Interest-rates-plummet-as-apf-2855358255.html?x=0
http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1273867200000&chddm=997050&chls=IntervalBasedLine&q=INDEXDJX:.DJI&ntsp=0
"Fed Decision: Holding Steady as the Recovery Matures;" Wells Fargo Securities, LLC Economics Group. April 28, 2010.
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