Is the free fall market correction worse than the one in 1987?
Answers: yes.
and the aftereffects will be a lot worse this time around. if i remember correctly, the 1987 crash was basically a one-time event to which the Fed reacted by lowering rates and then effectively doing nothing afterwards. rates actually went back up into 1988 and 1989. the economy itself grew in the late 80's and all through the 90's (with a mild early 90's recession), up until the recession that was just starting sometime around early 2001.
the problem this time around is that for the 4 times already that the Fed has reduced rates, stocks haven't rallied sustainedly any of the 3 previous times, and i don't think they will this time either. and notice how gold rallied each time! at this point there is only so low that the Fed can go. what the Fed is doing is only making the eventual market crash and recession worse later on than it would have been if the market were left alone to sort things out for itself. every economy needs a recession, however bad, to clean itself out, and we would have been much better off if the Fed actually *raised* rates, instead of lowering them...
THat one was like a 33% drop from 2640 to 1766 in a couple of months for the dow.
This one so far is "only" about 16% in 3 months. SO hardly.
So far, its not even as bad as the start of the 2001 recession, if you look at the 2000 peak to the first identifiable bottom after it. But it could get that bad, sooner or later.
My money would be that it does... except I don't make bets on trends.
Comparing two corrections or recessions is like comparing apples and oranges. No two corrections are alike. They share some of the same basic characteristics (meandering sideways - down trading, occasional intense selloffs followed by intense rebounds), but timeframes and peaks and bottoms will vary.
Where to invest?
My mother is 72 and has $5000. to invest. She's looking for count income with best dividend. She have a few bonds and a stock already. Small savings w/ social payment. Any suggestions would be greatly appreciated.Answers: If she is seeking an income look into blue chip stocks with low volatility and a fully clad quarterly dividend.
She should trade the stock market. Many professionals can generate 2 to 3 did-git returns on their money year after year.
All she desires to do is learn a few simple rules and develop a system.
This is a great website that can help out her with that.
T Rowe Price funds?
What funds are looking good from T Rowe Price? What do you ponder of the Emerging Markets Stocks(PRMSX) and New Asia(PRASX)?Answers: These are fine funds for emerging markets. But I would solely make them a small section of my portfolio. I would also add us large/mid/small hat funds, as well as a more broadly diversified international fund. Given the current souk conditions, might not also hurt to add some fixed income. Maybe a bond & money open market funds. Don't bet your portfolio on just a couple of funds.
Build your asset allocation plan 1st, next go shopping for funds to fit your plan. Here is an example of how I built my plan and/or funds at TRowe Price.
30% PRDGX Dividend Growth
15% PEXMX Extended Market Index
20% TRIGX International Growth & Income
25% PBDIX U.S. Bond Index
10% PRRXX Prime Reserve
PRMSX is also investing surrounded by Latin America. I would stay clear of that.
PRASX looks good, until we enjoy a war.
Expecting a rush on a positive commodity to start on Thursday/ Friday and rise quickly.