Not in any particular order...just 10 to consider. 01. short sellers 02. margin call sellouts 03. 401k/mutual fund investors pulling funds, forcing funds to sell into a down market 04. downgrades (which often come out after a stock tanks by slow analysts) 05. layoffs/fear of jobloss = less capital = less investors 06. tightening of loans = less capital = less investors 07. news perpetuating fear/pushing away retail buyers/especially with all the foreign market declines being shown as well 08. the irratic behavior of the fed/govt doing things that don't help and maybe make things worst with market manipulation practices. People don't want to invest in things that are artificially propped up. Especially big money that knows better. 09. Take all the above and apply it to foreign countries, companies, investors in the U.S. market who are more reactionary. 10. Major rightdowns coming out after numbers have to be recalculated.
Number 3 is why the market will be changed forever. Mom and Pop ain't coming back. Not now, not after this. They saw the investments take a serious hit during 2000, but bought into the buy and hold bullshit. They saw their money slowly come back over the last 5 years. Not all the way back, but back to an acceptable level. They have just seen all of those gains lost in two f'n weeks. They're out and out for good. Right thing to do? Probably not, but who can blame them? Especially when you have a government that participates in the criminal activity which has caused this plunge.
I agree. There have been 10 years of ups and downs, and the net effect is essentially 0% returns. I think we are going back to the old school model where the stocks would have to offer dividend yields twice the long bond yield, to make the equities favorable again.
unfortunately this seems to be the case, at least for now... the more ppl i speak to the more theyre disgusted and turned off by the markets. some have even said theyve shouldve just been in savings to begin with only to avoid the sleepless nights and recent stress.
Another reason that may push the market lower... Raised margin requirements on financial stocks and the removal of margin forcing people to sell their financial stock to cover new margin calls that wouldn't have existed otherwise.
If you add in dividends its above zero. Maybe not much better but something that should not be left IMHO