How bad is the economy going to get?

Question

The reason I wonder is because I have two mutual funds - IFACX and CIBCX - that I'm worried about. They are down pretty badly so far this year and I'm worried about how much farther they might go. I don't want to lose all my money. I invested in Dec 2007, which was clearly a bad time to invest now that I look back on it. How much longer is this downturn going to last? Should I get out of the funds before it's too late?

Answer 1

Nobody has a crystal ball about the economy.

Sorry, but for the most part most think it is already too late.

You won't lose "all your money".

With investing it is best to play the numbers.

The "average" Bear market falls 25% so "maybe" another 5% before it comes back.  

The "typical" (as in the most numbers) bear market falls 30% so it could fall as much as another 10% before turning up.

BUT things could change at any time and head up. So, imo, a typical risk of another 10% fall is worth staying in the market because it could turn up 20% in short order.

A better question might be how long this downturn will last.

At the moment we can't foresee anything that will drive the market up, make the economy get better in the short term.

Maybe a good GDP number this week will calm the market, but a bad one could hurt it. Jobs?

Answer 2

I wish I could help you out here, however it is only going to get worse. Recently the news reported 2 more banks folding,the housing market is in a pinch,Mortgage companies are hurting, ETC. It is not a bright future, and I do no mean this in a pessimistic manner, I am just facing facts and truth

Answer 3

The Dow:Gold ratio will return to its historic ratio of 1:1 before it's all said and done. It happens at the trough of every valuation wave.

Gold could hit 1500/oz and the Dow could fall to 1500.

Or Gold could hit 10,000/oz while the Dow slowly grinds down to 10,000.

Either way, that's how bad (or good, for me) it is going to get. Research Dow to Gold ratio!

Hope this helps you...

PS buy commodities, i'm making a killing!

Answer 4

I did just that 2 days ago.It was bad...but it could have been alot worse.

Good luck.

Answer 5

I made the same mistake. I thought that the economy were going to get better after the rebate checks are flowing back into businesses.  Consumer confidence would be boosted back up.  Eventually the stock markets would be picking up. But I was wrong.  I lost 25% of my shares.  I am thinking of pulling my money out and spend on something I need in life.

The only draw-back that stops me is the penalties IRS impose on early withdrawal.  I am condering withdrawing if the market is doing good next week.  I am not going have a good feeling about US economy 3rd and 4th quarters this year.