Will almost all companies fall with major indexes in the 4 year highs?
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I think it's a very psychological thing that investors feel they should sell off their market shares and go into more secure investments like bonds with the major indexes reaching their 4 year highs. Is it really psychological? Will almost all companies stock go down in a market retreat even for companies that have always consistently performed well? I hear they call it a "market correction" but is it really a correction when granting the market is REALLY performing well? Will this correction really come and how soon and is it ONLY because of the psychology of investors?
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Answer:
Well if I had the easy answer to knowing what the stock market is going to do, I would be a billionaire. I think you are partially correct about the psychological aspect of the market. Consumer confidence has a lot to do with how the market performs. But I think it is too simplistic to say the market will fall because indexes are at a four year high. The market it cyclical and people do want to lock in their profits when they can, but I also believe there is a lot of pent up demand - people have money they want and need to invest. When the market drops people pull their money out of investments, reduce their 401K contributions, and generally put their money in what they consider safe places. Then, when the market rebounds, people start buying back in. I'm sure economists and professionals on Wall Street have a whole range of opinions - and that's exactly what they are - opinions. My opinion is the market will continue to climb for quite a while, hopefully gradually and for a long time.
Akiko Himenokouji at Yahoo! Answers Visit the source
Other answers
Well if I had the easy answer to knowing what the stock market is going to do, I would be a billionaire. I think you are partially correct about the psychological aspect of the market. Consumer confidence has a lot to do with how the market performs. But I think it is too simplistic to say the market will fall because indexes are at a four year high. The market it cyclical and people do want to lock in their profits when they can, but I also believe there is a lot of pent up demand - people have money they want and need to invest. When the market drops people pull their money out of investments, reduce their 401K contributions, and generally put their money in what they consider safe places. Then, when the market rebounds, people start buying back in. I'm sure economists and professionals on Wall Street have a whole range of opinions - and that's exactly what they are - opinions. My opinion is the market will continue to climb for quite a while, hopefully gradually and for a long time.
Dr. Joe
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