How much to gamble on stocks now?

It is probably a good time to buy stocks as the market swoons over the Japanese situation. At the moment there is plenty of risk it might not anytime soon rise back up to levels before the swoon, though.

"If" it continues to go down I will start to get more interested. If the Dow gets near 11,000 I will start pumping it in. At that point IMHO the risk would be that more catastrophic news kicks in, like Saudi Oil fields going up in flames or whatever. I have $10,000 ready to go and will raise more probably. That is gambling what I can afford to lose, and you never lose it all in the stock market unless you buy an individual stock. The 10k is a small fraction of my stock holdings but a substantial part of my cash on hand. Worse case scenario is selling at a loss when I thought I was making a good move. It's a gamble!

Anybody else gambling on this situation?

Yeah. Everyone has different tolerances and needs, but FWIW, here are my thoughts ...

No matter who was/is in office when it started, the fact is, money is being printed to pay down US debts. Not good. Count on inflation going up as well as interest rates. If unemployment stays at 9% - 10%, there won't be any economic growth outside of businesses adjusting to a "new normal," which is very limited. (And no, I don't count a lowering of the rate due to people giving up looking as an improvement in unemployment.) In the late 70s, this was called "stagflation" because, before then, economists theorized that you couldn't have a period where both inflation and stagnant/declining economy.

So ... just domestic stock prices and indices going up will happen with inflation, countered by higher interest rates bringing them down. However they end up mediating, it looks to be a net loss in wealth. Therefore, I think you have to look towards inflation hedges and equities where US interest rate rise effects are minimized. Historically, this means international stocks and gold. My current portfolio includes roughly 15% gold and 40% international, and I'm thinking about going heavier in those two areas. So far, so good ... those two segments have gained about 4% so far in calendar 2011 and about 19% over the last 12 months.

My $0.02.

Oh, and some fun money in MGM, just to get their reports and stuff! Bought in spring 2009 at $3! Nice!

Quote: odiousgambit

It is probably a good time to buy stocks as the market swoons over the Japanese situation. At the moment there is plenty of risk it might not anytime soon rise back up to levels before the swoon, though.

"If" it continues to go down I will start to get more interested. If the Dow gets near 11,000 I will start pumping it in. At that point IMHO the risk would be that more catastrophic news kicks in, like Saudi Oil fields going up in flames or whatever. I have $10,000 ready to go and will raise more probably. That is gambling what I can afford to lose, and you never lose it all in the stock market unless you buy an individual stock. The 10k is a small fraction of my stock holdings but a substantial part of my cash on hand. Worse case scenario is selling at a loss when I thought I was making a good move. It's a gamble!

Anybody else gambling on this situation?

I feel for the younger people today in this country. Anything you invest in is a gamble. Jobs are far from secure and if you lose yours then good luck getting another one of equal value. Social Security won't exist and pension plans are disappearing. 401k matches are shrinking too, plus in the many years we've put into them it would have been a surprise not to see them double and quadruple in value. Up until the past few years it was like a slot machine that was stuck on PAY. To someone like me who was able to switch jobs at will in my career, guaranteeing a substantial salary increase along with a generous relocation package, today's challenges would seem almost too much to overcome.

I don't know the best solution for your choices, but I have confidence that todays generation will figure it all out by trial & error. Everything will continue to be a gamble for a long time until things settle down. In the meantime, for all of you who have non-Gov't. jobs, please keep working harder and smarter and go out and get 2nd jobs even. It'll help keep the SS fund viable at least for as long as I'll need it to be. And thank you in advance!

I'm going in silver right now and have been for a little over a year. Up over 80% in the past year alone.

Look up dollar cost averaging. As long as you think something will go up over the medium and long term, then you don't have to second-guess when to buy.

It's what I do, and I've done very well during the recent bust and subsequent recovery.

Yes, being down 35% ot one point hurt, but I was in for the 10-30 year time range, not 1-3.

Quote: thecesspit

Look up dollar cost averaging. As long as you think something will go up over the medium and long term, then you don't have to second-guess when to buy.

It's what I do, and I've done very well during the recent bust and subsequent recovery.

Yes, being down 35% ot one point hurt, but I was in for the 10-30 year time range, not 1-3.

My strategy exactly. Too many people buy high and sell low. Day traders have that dream of picking stocks. Most get their asses kicked.

Day trader I'm not, and also do dollar cost averaging for the most part [I have a 401k]. And I pretty much agree with the assessment that trying to time the market doesnt work, because you have to be right more than 50% of the time. However, it has always seemed to me that it makes sense to time some of your purchasing when the market is low and there is a reasonable expectation that some of the reason is panic. I don't try to time the *selling*, which I think is important.

I wound up investing a modest amount, about $1000, and didn't try to play the Japanese market. Looks like now the opportunities are gone and frankly were not that impressive as it turns out.

It's strange, most people sell at lows and buy at highs. This question should be asked when the Dow is in the 6000's, like it was a couple years ago. BUT, I hear it a lot now. Should I buy stock now? WTF? To me, picking individual stocks is like going into a Las Vegas casino and playing poker when you don't even know the rules. I don't mean to pick on you, it's just what most people do. If you have a $1000 that you don't care about & can afford to lose (like in gambling), then by all means!!

Quote: Yoyomama

I don't mean to pick on you... If you have a $1000 that you don't care about & can afford to lose (like in gambling), then by all means!!

if you check out this:

http://www.google.com/finance?q=INDEXDJX:.DJI

I bought during the dip and then quit. But I wasn't excited about the prospects and *only* invested $1000. I was looking for a swoon that would take the Dow down to near 11,000. It seemed possible. I don't deny that it is gambling!

As a matter of fact, for the record, I *was* buying at the 6000 dow and now kick myself for not buying more.

Has anyone else noticed we start down the path for a true correction but then come roaring back - I swear it's the TINA thing

I have planned for a long time what I am going to do if we get a real correction, 10% or something - and have assumed we will get one. This has put me too much in to cash equivalents esp. if you consider short term bond funds such.

market is acting now like it will support 18000 Dow after all

Except just as soon as it looks like it will support a level, then all heck will break loose.

The correction will come when the fed raises that interest rate. Even a 1/4 point will set off the dominoes.