Back in early March the stock market was in free fall. The right wingers started calling it the "Obama bear market." The conservative blog "The Corner" had predictions of the Dow hitting 5000. Another wrote, "5000 would be lucky. It's going to be 4000 or lower!"
I thought it was all pretty ridiculous. The price of a stock is based on many things, but profit and future profit are major components. The market had fallen to a point where it really couldn't go much lower. On March 3 I wrote the post Dow 6763. I thought the market had hit bottom and was ready to come back.
I was off by a week. The Dow slid to 6547 on March 9. Since then it's become a bull on steroids. The market closed Friday at 8574... that's a gain of 31%. If you had invested $1000 in a Dow index fund on March 9 you would have $1310 today (minus fees). That's a great return.
While nobody can predict a bottom with certainty, I came close. And if I had had money to invest back then and had done it, I'd probably be selling now. Just as the market was oversold at 6763, it seems a little high at 8574. It may not drop much in the coming months, I simply don't think there's much room for it to go up... and those cases, it's better parking money in a safe place like treasury bills.
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