(Stock Market Stats from June 24, 2007)
Everyone thinks they can time the stock market. They see Jim Cramer jumping and screaming on TV and think, "If he can do it, then why can't I?". Unfortunately, Mr. Cramer, along with just about every other stock market analyst, is usually wrong as much as he is right. That's just the nature of the beast that is the stock market. Both bears and bulls are pretty scary and unpredictable animals.
However, one of the few trends that tends to stick to the script is the proverbial "summer slump". This is when the stock market seems to do as we do: kick back, take a small vacation, and rest up a bit before launching into the hectic holiday season later in the year. Here's the statistics from last week to prove the slump may be starting very soon:
- Dow: 13,360 -2.1%
- Nasdaq: 2,589 -1.5%
- Nasdaq 100: 1,922 -1.0%
- S&P 500: 1,503 -2.0%
- S&P Midcap 400: 896 -1.8%
- S&P Smallcap 600: 433 -1.6%
Now, those aren't catastrophic losses by any means, but a clean sweep of negative percentages across the board is enough to pay closer attention in the coming weeks. Obviously, the best time to start a position or add to an existing one is when stock prices are at their lowest, and the summer slump usually provides a good entry point for most.
Stay tuned here next week to see if the trend continues, and keep an eye on it yourself. If prices do drop a few more percentage points, it could be a great time to add to some of your positions.
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I know this article is old, but it looks like the strategy would have worked pretty well this year. I don't know if it's just a coincidence but I'll definitely be looking into this more closely next summer.
But it looks like there may be a "winter slump" too…
That's why you can never count on any trends. There are always exceptions.
Speaking of slumps, the market is in a major one now and doesn't show many signs of life.
There's always bad headlines that people overreact to like the sub-prime mess right now, but the consumers will show up once again this holiday season and come to the rescue. They always do…
With the credit crunch a lot of great stocks are at bargain prices right now. You may want to look into some if you've had your eye on a few, now's the time to score them low.
It's all about dollar cost averaging. If you pick a specific plan and continue to contribute to it on a schedule basis regardless of what the market looks like, you can be almost assured that you will do fine.
If the market were ever in a "slump" I would say it's right about NOW!
This may be the better opporuntity to buy more stocks… and build a portfolio..
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