So where is the stock market going?

[Stan Calow]

One’s investing approach might be akin to gambling but the stock market itself is not. The function of the stock market is for companies to have easy and quick access to funding by raising capital with the sale of their stock. They sell equity, the public become owners with a stake in the company.

Once the company has sold the initial offering, all the rest of the buying and selling is between people. The company doesnt get any more capital from those transactions. Its the daily back and forth trading that makes the price fluctuate. And most people participate in that process expecting to make money on transaction, not on long-term dividends.
I may have been flippant calling it gambling (I had just watched The Wolf of Wall Street again); speculating is more accurately the term. I don't know anyone anymore who buys or sells individual stocks based on the P/E ratio, but rather on guessing on whether the share price will go up or down.

[Brian Holcombe]

I’m aware of that, I was very specific in how I worded my post.

I agree that speculation is the word for it becuase even if you are buying on fundamentals, you’re still guessing the price will go up. They still move mainly based on fundamentals over the long haul, otherwise we would not care at all what their earnings look like. Things can get out of line with that fir short periods of time but reality strikes eventually.

The stock is priced at what the market determines after IPO and that trading after which has no effect on the money raised, but if a company needs to raise additional capital it can do by selling additional shares at market pricing. That is the reason why share price is important to any given company, it’s a way to raise capital as desired.

I invest for dividends for the same reason I would not give an interest free loan. Large cap Stock dividends are probably the last bastion of passive income that is actually turning a reasonable rate of return at a moderate risk. Bonds aren’t paying much at all until you get into higher risk traunches and owning real estate is too involved.

[John E. Hobart]

Dividends paid are one of the major factors in what I buy in the stock markets today, retirement does that to a person. That being said , the markets have been great for my portfolio this year, since Jan 2 my aggressive total portfolio is up right at 25% year to date.

[Tom M King]

Thanks Peloton, even though I like the NordicTrack bike better!

[Thomas L Carpenter]

I mentioned to my advisor that I don't mind paying taxes to support the way I live. She nearly had a heart attack.

It certainly does, outside of the limitations of tax-advantaged accounts. There’s nothing wrong with paying taxes (that’s how a civilized society operates.) With investments that do really well, it’s part of the deal, that allows us to live in a country where that can happen. We also have good accountants...

[Bill Dufour]

Well my tesla dropped 5% yesterday and is set to drop 4% more today.
Bil lD

[Bruce King]

The worst thing some do is to have their money invested in the same company they work for. I saw several do that when I worked at the airline and they lost a hundred thou or two. Some lost their jobs and their money.

[Malcolm McLeod]

The worst thing some do is to have their money invested in the same company they work for. I saw several do that when I worked at the airline and they lost a hundred thou or two. Some lost their jobs and their money.

Say it with me ..... E-N-R-O-N.

[Jim Becker]

The worst thing some do is to have their money invested in the same company they work for. I saw several do that when I worked at the airline and they lost a hundred thou or two. Some lost their jobs and their money.

The mistake folks make is to have "too much" invested in their own company. There's no harm in having some investment and when there's stock options as part of compensation as well as favorable employee stock purchase costs, and with careful management, one can often do well. The very expensive addition on our home was made possible by that. But as in anything, moderation and diversification is important to balance out risk. I do know many folks who put everything in their employer's stock blindly and did, in fact, lose most or all of it. I carefully managed things during the time my employer was publicly traded (went private a number of years prior to my retirement), including being careful about cost basis when selling to diversify. Between that careful management and fully embracing my 401K, I was able to retire early at age 60 and I'm living with net income similar to what i was earning while employed.

[John K Jordan]

...I was able to retire early at age 60...

Congrats! I fully support early retirement - I was quite fortunate to retire at 56 in '06 and am thankful for every day.

My heart aches for working people now losing their jobs, insurance, savings, housing and even hope due to complications surrounding the pandemic.

[Bill Dufour]

In vesting in one's company has a big drawback. My uncle worked for Lockheed and had a a stock plan. It worked great until it came time to retire. He had to retire early because the bushiness tanked at the end of the vietnam war. His retirement stock crashed and he was forced out. His stock did recover several years after he died so his widow was okay.
Similar happened to my wife's father at GE when they closed the US factories he had worked his entire life at. But her mother did not understand the market and sold all his stocks at the bottom when he was laid off and died soon after.
Bill D.

[Doug Dawson]

My heart aches for working people now losing their jobs, insurance, savings, housing and even hope due to complications surrounding the pandemic.

I’m totally with you there, it’s painful to think about. We’ve been donating money to the local food bank, and supporting other helpful causes.

[finlay gray]

Into a recession or where a Tesla car is headed.