The stock market has been very temperamental lately. This month the Dow Jones has had drops of over 400 points four different days. The market's ups and downs make brokers nervous and cause some investors to feel nauseated. However, historically the market always goes back up eventually.
Today's drop of the Dow Jones by 419.63 points has led some to joke about the "Down" Jones. The dip in the stock market today "erased more than $600 billion of U.S. market value," notes Bloomberg.com. Since late April the S&P 500 is down 16 percent. Is a bear market ahead, or are investors still bullish on U.S. stocks?
Some people look at dips in the market as a time when there are great deals on stocks. Other people get panicked and sell off stocks when their price has declined. Investment guru Warren Buffet seems to like buying stocks when the market drops. He recently said, "I like buying on sale. Last Monday we spent more money in the stock market buying than any other day this year," reports Bloomberg.
It is hard to predict when the stock market will stabilize. The Standard & Poor's downgrade of America's credit has spooked the market. There could be an agenda to the downgrade though. After all, the company that runs Standard and Poor's has a CEO who is Republican and makes donations to the GOP. Could the company be trying Machiavellian tactics to crash the market to make President Obama have one more problem to deal with?
Whatever your investing strategy, the current chaos in the stock market could frazzle your nerves. Investing is always risky. Buy stocks at your own risk. However, historically the stock market has always bounced back from difficult times.