Stock market is for suckers!!!!?????

[razz]

The Canadian equivalent to Time magazine is called Macleans'. It has a feature article about how the large private companies are skipping the stock market and obtaining funding trhough investment houses who contact high value/asset clients only.

"Goldman Sachs offered via email to their wealthy clients in early January to buy a piece of Facebook. GS and a Russian investment firm bought $500,000,000 in a private transaction and then offered shares through a special fund to private clients who could invest $2 million. When regulators got concerned at the optics (SEC bars unlisted companies from accumulating more than 500 shareholders), GS now offers these shares to foreigners only.

With private financing, fewer companies either need or do go public to raise funding. The IPO's offered on the US market have dropped from 7500 in 1997 to fewer than 4100 today. Where does the regular investor find opportunities for growth?

In 2004, John Templeton warned that the 'stock market is broken".

Over and o ver advisers are saying. "put your money in the bank".

Yikes!!!!

[Bronxboy]

Razz, I'm not quite as negative on the stock market, and I believe that not investing in stocks has its own risks. Specifically, not keeping up with inflation and losing principal in bond investments due to increases in inflation. Another is long term lock-in of historically low interest rates in annuities or CDs.

A five year CD in the U.S. at 2.25 to 2.6% (Bankrate,com) doesn't look so great either.

Even though increases in U.S. stock prices have probably gotten ahead of the very anemic economic recovery, we (in our early 50s) carry about 40% stocks in our retirement accounts (TIAA-CREF and S&P 500 funds) plus some international funds.

While bank interest in Canada was higher than in the U.S. last time I was there (about 18 months ago), stocks in established companies still make a reasonable investment. That would include minor (10 or 20%) exposure even for the oldest investors.

[Gregg]

Where does the regular investor find opportunities for growth?


Value is more important than ever. Find that and growth will follow.

[ApatheticNoMore]

It might well be. But as has been said I don't think we always have a lot of good alternatives. It's certainly not a good place for short term investments.

[bicyclist]

I don't believe that the stock market is 'broken." It is a hard place to play for the individual and complicated enough. Those of us who are trying to simplify our lives do well to hedge our bets and avoid putting all of our eggs in the same basket. I suggest perspective investors buy mutual funds, preferably "no-load funds" where there is not initial charge. Do some reading and try to learn more about investing before jumping in. "Investing for Dummies" is not a bad book to read. It is widely available in bookstores.

If you have some background in finance, I recommend "A Random Walk down Wall Street" by Bernard Malkiel. The book has been through many revisions and clarifies alot of complicated issues. John Bogle's "On Mutual Funds" is outstanding. He is the founder of the Vanguard Group and writes very well.

The important issues for investors are your goals, your tolerance for risk, your stage of life and your financial situation. The Vanguard.com web site gives very useful exercises for perspective investors to consider and is worth the time and trouble. Short of going to a highly reputable and likely expensive advisor, it is very helpful in enabling you to think about your own attitudes towards investing.

Sincerely, Bicyclist

[Gina]

The stock market always "climbs a wall of worry". The time to be really concerned however is when everyone is saying "the stock market is the best place for your money," and after a long run-up everybody is putting their savings into it.

[Kestra]

The stock market always "climbs a wall of worry". The time to be really concerned however is when everyone is saying "the stock market is the best place for your money," and after a long run-up everybody is putting their savings into it.

Yeah, that's when I start cashing some out. I was pretty happy (personally) after the last crash since I had some cash available to do some discount buying.

[loosechickens]

Well, I certainly agree that the stock market is not the place to put money that you might have need to use in the next half dozen years, but for long term retirement money, and protection from inflation, it still looks pretty good to me. Most of the stocks that we own pay dividends, so income is decent regardless of stock price at the moment.

I know that "past performance is no indication of future profits", but over my lifetime, investments in stocks have been very good to us. Even given the various downturns, 1987, 1999 and the big one recently, we're still in better shape than if we had had that money in other instruments or investments.

There is a place for fixed priced investments, but there is a place for equity investments as well, and protection from the ravages of inflation is the best reason, to me, for continuing to invest in them. We are long term investors, and have always taken that long term view, rather than chasing quick profits, and that approach has worked well for us. Who knows whether it will do so in the future? But the stock market being for suckers? I don't really think so, unless someone is chasing that "day trading, quick profits" kind of casino investing.

[freein05]

I guess you could invest in real estate. I have been in the market for over 30 years and it has been very good to me. I buy and hold and do not play. I actually bought high quality stocks over the last couple of years and they are paying off. I look for stocks with good secure dividends.