Investors rocked as big stocks plummet

[see_change]

This was the headline on the SMH today

Investors rocked as big stocks plummet.

For anyone who has been watching the stock market with any degree of attention , this would not have come as an earth shattering relevation.

After the tech Wreck on april 2000 , people sought refuge in two places

Blue chips or property. Everything works in cycles. While I have be an interested observer for many years , I have never been an active participant in "investing" untill the last two years. I missed out on the share boom , but have picked up on the last of the property market cycle.

The thing that has struck me is that , if you educate youself, it doesn't take much to pick up on what is actually going on. The dollar is rising ( it has been for quite a while ) and gold is now booming ( ditto as per aussie doller ). The share market is going to the crapper ( what's news ...start looking for opportunities). The property market is topping ( where ? where not , what do you do ?)

If you educate yourself and read what is going on , none of these come as a surprise.

There are still people getting out of shares and into property ( my accountant told me some of his clients are still doing this ) , but for how long? If they buy at the top of the market, they may not have to sell , but after a while they get disillusioned ... how long willl this take ?

The markets are a summation of all the individuals involved. All their dreams , aspirations and fears. In shares the bulls go up the stairs but the bears go out the window.

see change

 

[loner]

markets crash

See-change, I bought my first IP in 1998 (in Carindale Bris.). I saw the block of land in an Australand estate a couple of years earlier and thought it would be a good buy. Noticed a spec house had been built on it and made enquiries. The prices had not changed during that time and I thought things have got to take off soon. They actually took off about the time the Gov't upped the FHO's grant to 14K in early 2001. Fortunately, working on the afore mentioned theory, I had bought a block of land two weeks earlier. The market in Bris. has really rushed ahead since then and locals are wondering if it will keep rolling. I'm sure it will though I am looking at the moment for another house which is new and neutrally geared, my other homes are positively geared. Those houses are not so easy to find. Meanwhile I have bought shares off and on over a period since the late 80's. I am a bit of a speculator and whilst I had some successes e.g. ANZ $4 to sell @ $18.50 I had plenty of failures i.e. Bell resources $ 6.50 sell @25cents. Beware of Financial Advisors who tell you the All Ords will always rise above its previous high; what they don't tell you is the companies who make up the AO's are in a state of flux i.e. Bell resources used to be one of the highest capitalised stocks it no longer exists. (and there are too many other former AO companies who also have bitten the dust)
Good shares like good property will always retain their value. I bought 1K CBA a week ago for $25.49; on that day and given CBA maintains its div distribution I will get a return of 9% fully franked over 53 weeks. Do you think CBA will be worth more or less then? Does it matter, but I'll bet they are still around and make up a stock on the All Ordinaries.
We become educated by doing things and by reading what others have done. What I have learnt is that quality products will always be that whether they be property, shares or some other form of valuable.