Stock Market is Wrong Place for Small Investors

I have been investing for years. A few things you learn from such experience are that the market rarely goes up this fast and this long, that it is time to run when everyone starts talking about happy times continuing -- all those "experts," and that it behoves you to ignore all those who say it is time to throw caution to the wind and get in now inspite of what appears to be an inflated market. This is an interesting time. All of the above is happening. Interest rates are historically high. And, it is only a matter of time, before the market suffers a big fall. I would get out now and enjoy the higher interest rates.

I have been investing for years.  A few things you learn from such experience are that the market rarely goes up this fast and this long, that it is time to run when everyone starts talking about happy times continuing -- all those "experts," and that it behoves you to ignore all those who say it is time to throw caution to the wind and get in now inspite of what appears to be an inflated market.  This is an interesting time.  All of the above is happening.  Interest rates are historically high.  And, it is only a matter of time, before the market suffers a big fall.  I would get out now and enjoy the higher interest rates.

A lot of people, of course, are arguing that things are different this time.  They did that before the tech buble burst too.  A lot of others say there is just so much money out there that the market will continue to rise.  A lot of people say a lot of things, and they have said these things over and over again.  This is why the average investor has trouble figuring out what to do, and usually is caught short. 

Market timing is impossible, but common sense is not.  All the signs are there suggesting that if you are a small investor and if you can't afford to see your asset base decline, then it is time to start taking advantage quickly of those good and short term rates.

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Comments

  • Anonymous

    June 23, 2007

    I would tend to agree. It's always the small guy that gets burnt when the market tanks. I prefer to invest in myself rather than invest in the market. Thanks for the article!

  • Anonymous

    June 23, 2007

    I've heard that the sign that it is time to get out is when your hairdresser starts to roll off stock picks.

  • Anonymous

    June 24, 2007

    The biggest sign is that everyone is talking about Jim Cramer.

  • Anonymous

    July 05, 2007

    I put my money in index funds and etfs don't worry about the market. If you have your money in individual stocks you could get clobbered.

  • Anonymous

    July 15, 2007

    Agree about the main comment about the need for a small investor to be careful, particularly now (7/14/2007) ..

    But, I see that you mentioned historically high interest rate.. this is not true since interest is actually historically low, but going upwards since the past 2 years ..

    http://creating-wealth.blogspot.com/

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