I remember as a child the stock market trading around 5000-6000 what would happen if it hit that level again?

Question

I remember as a child the stock market trading around 5000-6000 what would happen if it hit that level again?

Answer 1

Common Fallacy: The stock market does not always grow. It's generally called going into a recession. Not a DEPRESSION just a RECESSION. Nothing will really happen. According to the government, a weakened dollar is a good thing in that it will increase our exports and make us more competitive in the world markets.

For example, the housing prices were extremely high a few months ago. The prices were just rediculous. Now they've receded. Ask yourself this: Do I feel a lot different than I did 6 months ago?

-and-

Is the world still turning?

If you did not answer "no" and then "yes" for those questions, you are either a real estate agent, or trying to sell your house.

I hope that explains it.

Answer 2

I'd be buying like mad

Answer 3

You'd be younger.

Answer 4

I remember it trading at the 500 level.  It does not seem that long ago.  I think Jimmy Carter was president.  What a disaster he was.  Shoud have been a carpenter.  But what am I saying?  Compared to Tricky d**k, I guess he was not bad at all.  Anyway it took the Gipper to get things going again.  

What would happen?  There would be a whole lot of folks with 401k accounts that would not be all that happy.  Actually, there are a lot of displeased 401k account holders currently.  Withdrawals are currently a significant problem.  

There was a time which very few currently living people now remember when the market did sell off of that magnitude.  1929-1933.  Perhaps we can use that as a basis of what might happen should the market drop from its current level to say 5000 from its current level of 12,000.  Heck that is a decline of only 58%.  

In Jan. 1973 it was at 1067.  In Dec 1974 it had dropped to 570.  A decline of 46+%.  The world did not come to an end.  But there were no IRA accounts nor 401k accounts back then.  Just Tricky d**k.

In 1929,  it dropped from 381 to 198 in a matter of days.  It did not stop dropping until 41 in 1932.  What is that now?  An 89% drop.  Perhaps we have something to look foreward to.

Back to what would happen.  Well The 1974-1975 recession was the 6th longest in U S history 16 months.  The 1929 recession was the longest 43 months.  The 1929 recession (depression actually) changed U S history.  The government became big brother to us all.  

When the market drops again it might be because no one can any longer live beyond their means.  Credit cards tapped out, home equity tapped out,  food taking a much larger portion of their income,  medical expenses taking a much larger portion of their income,  a government sitting in Washington and doing nothing to address the economic problems but instead waging grossly expensive wars overseas,  energy costs heading for the stratisphere, financial institutions going bankrupt left and right because their CEOs were more interested in maximizing their bonuses than in what was good for the institutions, global warming changing the weather patterns that bring drought and floods while the politicians take the campaign contributions from the companies that benefit by doing nothing about global warming.  

Things might get very bad for everyone but the politicians and the pampered CEOs who are hauling down multimillion dollar compensation packages while they run their companies into the ground.

Answer 5

You remember the stock market when you were a CHILD?!!!  Wow...that's not normal...