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In just over a century, the stock market has changed drastically. For most people, the stock market isn’t something to focus on. It’s an emotional roller coaster that we ride with excitement, fear, and sometimes dread. In fact, the stock market can be considered the most emotionally draining activity on our planet.
The problem is with the emotional roller coaster, you don’t want to go up or down. If you ride it at a steady pace, you will eventually reach a plateau where you wont lose any money. In the history of stock trading, the highest points were reached in the late 1980s. This was when the stock market became the most volatile, the most popular investment, and the most widely followed.
Well, it did go up and down in the late 1980s. There was the famous 1987 stock market crash that sent the Dow Jones Industrial Average into a freefall. The crash caused the Dow to drop by over 600 points, making the stock market one of the worst days in history. The Dow was also one of the most volatile. During these volatile months, the Dow was down over 250 points.
In the early 1990s, the market was much more stable. After the crash, the Dow fell over 50 points per day – which is quite a bit. The Dow did not go back up to the mid 1990s until 2005. The stock market went even higher during the 1990s. This period between the crash and the recovery is called an “uptrend.
This past week, we saw a small, but significant upswing in the Dow. The market hit a new all-time low on Christmas Eve (on the 25th), and the Dow was one of the biggest gainsers on the 17th. The Dow closed at 8,500 points on the 12th. But on the 17th, the Dow was down over 400 points. This is why we know that the Dow is very volatile.
This is why it’s very important to have a strong financial policy and a stable job and/or career. It’s also why we need to keep a close eye on the stock market. The Dow could easily be in the red and the stock market could be down over 400 points. It’s important to be aware of market movements and be prepared for them.
So if the Dow were to fall over 400 points, it would be a big gainer on the 17th, right? Well, it doesn’t happen that way. But it is still very important to have a solid and stable financial policy and a stable job and or career.
You can still lose money on Wall Street, the S&P 500, or the NASDAQ, but if you have a stable financial policy, it will make your day a lot easier. We’ll be talking about these in a future post.
If you’re a young, inexperienced investor, the SampP (S&P500) is a great place to start. It’s a 500-stock index that tracks all the stocks on Wall Street. If you’re an investor who’s been investing for a while, you may not be aware of what the SampP500 is, but you should be. The index has some very important, and well-known, stocks that are included.
The SampP is designed to provide you with a simple, but meaningful way to invest. The SampP500 makes it so easy that you dont even have to know anything about stocks. It simply lists all the 600 stocks that are on the SampP500 and lets you pick from them. I picked a set of stocks that are included, including some that I already own.
