Are todays worries and jitters of the Stock Market JUSTIFIED ????
( this is part 1 of a 2 part article)

Let’s talk about the Stock Market and the fears that we all have. After all,it’s about money, which is a somewhat of a concern to most of us.

What bothers me most is how the media is so negative and it seems they get excited every time the Dow drops 100 points or more. Let’s take a closer look at a few things:

1st…Why does the market go down? Simple Answer…there are more SELLERS than BUYERS.Which begs the question…WHY are more people selling?

Could it be all the negative news of a recession? Maybe it’s the 2 or 3 BAD clips that the media chooses to report to the public? Maybe it’s your stock broker seeming unsure of the future of the market.Perhaps it’s the “rumor spreading guy” at the cocktail party who has NO CONFIDENCE based on all the news he hears, everywhere he turns?

2nd…WHAT IF…..the majority of the market either HELD their positions, or, looked for BARGAINS to BUY?

Before answering this, lets address a few things.

a.)For one, the stock market is a risk/ reward business. It’s not for kids or rookies, without some assistance.
b.) Second, without question, there are some economic concerns out there. Nationally and Internationally there are plenty of variables occurring daily, not to mention the challenges of the war situation.

Therefore...some homework is required, along with COMMON SENSE.

Example:: We all know that gas prices are going through the roof. We all know that airlines, due to fierce competition for our business, have kept flight prices extremely LOW. On top of that, wages and other costs of living keep rising with time. Therefore, common sense would tell us that it’s tough to make a buck in the Airlines business.

Conclusion: Airline stocks may not be the best buy,at this time.

c.)Third, the market does not go on a straight line, up or down. It ebbs and flows. It goes up 50, then down 70, then up 40, up 35 , down 15 etc, etc. If you were to look at a long term chart since the 1930’s, you would see quite an impressive long term rise OVER TIME.

So, in the event you are not a day trader,or you DON’T NEED to cash in, why not hold on to your position, or, even look for bargains and BUY MORE? Thats exactly what the world famous Warren Buffet does.

One stock professional I interviewed said this….“ The stock market is the only store in the world that when the PRICES RISE, people want to buy more. When things go on SALE, they get nervous and don t want to buy.” Bizarre huh?

If Macys had some perfectly good POLO(RL) shirts on sale for $9.99, they would be swamped with customers.

If Starbucks came out and said, we are selling all cups of coffee today for $1,their doors would be knocked down.

If Mobil said we are selling our best quality gas today, for 1 day, at 70 cents cheaper than yesterdays prices, how big would the lines be at their gas pumps?

The point is WHY ARE WE SELLING? As stated above, more selling, less buying makes the Stock Market go down.

Are we selling because Fred at the water cooler mumbles some negative chatter? Are we selling because the Today Show "experts" say it’s scary out there?

Or,are we selling for a GOOD REASON? If we aren’t pressed to sell, perhaps it’s better to be patient. Assuming the companies you are invested in are doing GOOD THINGS and finding ways to MAKE MONEY, maybe, just maybe, they are ON SALE??

(Part 2 Tomorrow...some things to look for in a good quality stock)

Author's Bio: 

TA Smith is the founder and creator of Smile-Therapy.com
A graduate of UMASS, Amherst.
A former Dale Carnegie graduate.
Smith loves to golf,ski,read,walk his chocolate labs,and listen to jazz and country music.
Smith's motto: Work hard, have fun,help others,and make people SMILE.