Question for those who have been in the markets for awhile

Posted by made to trade on May 09, 2012 (10:02AM)


Hello,

I've only really started following the markets in August last year, and I started trading/investing in September.  My question is, before each market crash or decline (besides the flash crash) was there an overall sentiment amongst retail investors of an impending market decline?  Like right now, or actually since ~December 2011, no one would have been surprised if the market crashed tomorrow.

What were the previous crashes and large declines like?  Did most people have that looming suspicion or did it always come by surprise?

Thanks

Posted by spshapiro on May 09, 2012 (11:23AM)

The joke can be modified, “The market has predicted 10 out of the last seven crashes.”  There is always someone, somewhere saying “crash”, and of course vice versa. Then again, the worst crashes, and of course the biggest gains, seem to come out of the blue; hence, people saying be a contraian.

You do doubt have heard from one or two old heads, for more than a month “Sell in May…”  Well, if you haven't already done so, there is a question whether or not you are too late. My own thought is, it never is wrong to do that which lets you sleep at night, but like poison, doing a little might cure you, doing a lot, might kill you.    

Posted by BayouSteve on May 09, 2012 (11:39AM)

MTT - there is no real way of knowing when to get in and out and time the market or even what to buy. As far as predicting a large pullback or even a crash, many people have a threshold and when that is reached, they bail. The question becomes do the institutional investors want to provide some support or start buying on the dip.

Posted by Obama Bin'Laden on May 09, 2012 (02:12PM)

I feel we will pullback real soon, we need it and it's healthy.
The charts are also screaming it to me...

But everyone has their own opinion and thoughts, I use some indicators and charts. Find what works for you.

If you want to go long, I suggest AT LEAST buying in parts of your full position you want.

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