Stock Market Sell-off?

I try hard to be a rational investor and not panic when I hear bad news about a company I invest in. I have try even harder to ignore the nattering nabobs of negativity when broad economic news is released, and it looks bad.

However, the murmurs I heard last year about how the stock market is due for a reversal have turned into roars.  As I have said before, being a contrarian can be very profitable. I have also said it is impossible to time the market and get in and out at exactly the precise time. But sticking in the market is getting to be a tougher proposition for me in the short term.  More and more pundits or investment professionals see at least a small downturn coming if not a huge 10% slide.  Wall Street has a heard mentality, and no matter if the negativity is created out of real or perceived problems; soon it will not matter.

A tipping point will occur soon, if it has not already happened, that the stock market must have a period of negative returns to appease the investing gods.  Once that happens a small downturn like at the end of February could turn into to a massive exodus from the market, especially if investors behave as they did and do in regards to the housing market.

What do you think?

Written by Nagel on July 3rd, 2007 with no comments.
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