The future of the stock market?

Question

Where do fellow investors think the stock market is heading in the future? Are there any certain stocks or sectors that will benefit most from today's 'troubled' times in our(or most) economy(ies)?

What advice would one give to a new investor who just made his first stock purchases in July(and is now -6%,lol) and wants to know tricks/advice to achieve success in investing

Answer 1

Stock markets have been around since the 12th century, they will survive without or without many investors.  Good investors/traders make profits in good market and in bad.

Every experienced investor/traders knows that the market goes up and down and not up or down.   You have to invest with what the market is giving you and you never try to out guess the market.  The market is always right.

Just like any other venture one tries, the only way you can be successful is to know what you are doing, why you are doing it, and how to do it.

Many new investors jump into the market after hearing all the good that has happened and they never take the time or even have the initiative to learn what the bad can be.

There are no "tricks" to investing/trading, but you should take the time to learn about investing, what products are out there and how the markets operate.

What not read about how the professionals operate in the market. Try reading

What Works on Wall Street by James O'Shaunessey

Beating the Street by Peter Lynch

One Up on Wall Street by Peter Lynch

How to Make Money in Stocks” and 24 Essential Lessons for Investment Success both by  William O’Neil

If you're not a reader at least get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance.  (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why.

There are many other websites that advise or help investors, both the amatuer and the professional.  Like any other thing in life you want to do, you have to work at it.

Answer 2

The broad stock market will continue to grow at an average rate of 10-12% (including dividends), long-term, just as it always has.  If whatever you bought in July that has "lost 6%"* is a sound purchase, then buy some more to "average down" your purchase price!

Investment winners buy stock in sound companies, hold it for a long, long time, and pay no attention to daily, weekly or monthly fluctuations.

Answer 3

That the stock market has great returns long term is a myth. Since his introduction, the Dow has gained an average of 1,8% a year (adjusted for inflation).

Sure, if you knew beforehand, which of the many stocks today, will be a winner in 10 years, you would make a killing, but so far, its just accidental and nobody knows.

The Dow is actually for the last 10 years 32% down, adjusted for inflation.

Answer 4

Investing successfully (especially in difficult markets like this one) takes a lot of preparation and study beforehand.  I waited a few years before I started investing and even though I missed a bull market, I'm glad I waited.   I know so much more about the market now, but I still have sooo much more to learn about it.  I'm not even close.  Remember, if it were easy, everybody would be doing it.  Like any profession that pays well, investing successfully in stocks requires a lot of hard work and preparation.