<p>A) a fair game for the retail investor
B) A volatile market best served by professionals
C) a ponzi scheme
D)a scam perpetrated by hedge funds and big money managers to run the market up, and then sell it off…</p>
<p>There is no way the market should dive nearly a thousand points,only to recoup almost all of them within 3 days…</p>
<p>The stock market is made up of the psychology of people…and people are not always calm.</p>
<p>Plus…one day the European, countries and banks are not going to be bailed out…the next day they are…</p>
<p>I have a question for the economically educated that I would like to get in before this thread goes the way of the other interesting financial threads-vaporized.</p>
<p>Doesn’t the huge volatility we’ve seen mean the Fed and State governments will rake in capital gain taxes this year? Do the big funds pay capital gain taxes at the same rates as individuals? I guess the gains will be balanced against losses, does it all even out?</p>
<p>"Doesn’t the huge volatility we’ve seen mean the Fed and State governments will rake in capital gain taxes this year? No.</p>
<p>Do the big funds pay capital gain taxes at the same rates as individuals? Individuals in the funds pay the cap gains taxes.</p>
<p>I guess the gains will be balanced against losses, does it all even out? No.</p>
<p>gains or losses are calculated only if you trade the stock. paper gains and losses do not count.</p>
<p>The stock market is a means for greedy people on wall street to skim money when moving it from one pot to another.</p>
<p>I long ago decided that the stock market has all the foresight and intelligence of a large flock of starlings. They’re all calmly feeding in a field. Then, one sees a blade of grass bend and panics. All the others see the one take off and soon all 10,000 birds are rushing off in terror. All because an ant was climbing up a blade of grass.</p>
<p>That’s how the market seems to work. Huge drops because some vaguely bad news comes out and the market decides that Armageddon is coming. And yet, everything is always fine a few days/weeks later.</p>
<p>Mutual funds report their capital gains/losses, income, etc annualy that (and as dstark notes above) the individual taxpayer reports on their schedule D even if you don’t sell any fund shares during the year. In addition, if you sell fund shares during the year, you will need to report the gain/loss on those shares, using the tax basis the fund company provides you.</p>
<p>This is the big disadvantage to owning mutual funds vs individual stocks. You can end up paying taxes when you did nothing to your holdings during the year. Also, unrealized losses on holdings are not passed through, only the realized portion. (ie/ if the mutual fund sold the stock during the year). </p>
<p>A savy investor can avoid these paper gains by selling shares prior to the date of record for tax purposes. You need to hunt around for these dates, but they are available.</p>
<p>The stock market is trading the VIX which is a measure of volatility which is a placemark for psychological / economic uncertainty. Hence it is in some traders’ interests to create terror in the country and to make the world economy seem to be poised on the brink. This is at least one factor in the way news is presented and how the stock market resonds IMO.</p>
<p>The stock market is a vehicle for IRA investment; if you know what you’re doing you have a chance to keep your nest egg; if you don’t you are at risk of taking a 200k retirement pot and investing it in stocks in a bubble like in 2000 when my DSister lost her H’s 20 year retirement benefit.</p>
<p>The stock market is indeed a ponzi scheme as is all of capitalism to a great extent; the system relies on growth/continued increases in investment.</p>
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<p>On other other hand, it’s in many traders interest to keep people thinking that everything is fine and the stock market is a great way to save for retirement. IMO, the average person has no business putting all their retirement savings into the stock market, though practically everyone I know has done just that. People are still reeling (and can’t retire) because the stock market, as of today, is down 22%, from it’s high in 2007. I know a lot of people who have kept their money in the market, despite the tumble in 2008, on the expectation it will go back up. Yes, it can go up but it can also go down, in fact way down and if you don’t know when to sell, you can end up losing a lot more. I think people are feeling like they’re stuck between a rock and a hard place.</p>
<p>Is the world’s economy on the brink? Really, no one can really answer that question but the truth is it’s pretty shaky at the moment. The banking industry, the debt crisis in Europe, credit ratings falling over the world, a US economy that has barely managed to stay even for the last 3 years, an aging population getting ready to retire with little savings. There’s a lot of justifiable concern out there right now.</p>
<p>… manipulated.</p>
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<p>The correct answer is E) All of the above, with the proviso that the retail investor has to be educated and quick enough to prevent C) and D) from crushing him/her.</p>
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Agree. I still have a large chunk of our retirement money in cash. Still on track to retirement. When I tell people the percentage I have in cash, they think H&I are crazy, but we sleep very well at night. We invest in the stock market for the future generation but not for us.</p>
<p>^^I have 80% of my retirement money in CASH, earning more or less 1% yearly now. I am still thinking where to put it, after 30 years…</p>
<p>I really miss Louis Rukeyser. His comments in this clip from 1987 haven’t lost their relevance (Dow was in the 1700’s!). Can’t stand the current crop of stock-evangleists barking advice on cable shows.</p>
<p>[After</a> the Crash - Part 1 - Wall Street Week Oct. 23, 1987 - YouTube](<a href=“After the Crash - Part 1 - Wall Street Week Oct. 23, 1987 - YouTube”>After the Crash - Part 1 - Wall Street Week Oct. 23, 1987 - YouTube)</p>
<p>^I shorted the market on Friday before black Monday. Made some money but not much as expected because we didn’t trade by computer back then, only by phone.
I do mis listenning to Lou. I think I listened to him almost every Friday.</p>