Do You Root Against the Stock Market?

Do You Root Against the Stock Market?

Indianapolis, IN · Member since 2013 · 549 posts · 310 votes

I work at an asset management shop. We trade securities and watch the markets very closely every day. Today while watching the DOW drop almost 500 points at its very bottom, I found myself, as I do many days, rooting for the stock market to go DOWN.

And I thought to myself: I always root against the stock market.

Why? I think it stems from my distaste for people with what Robert Kiyosaki calls "poor financial IQ." I am 24, and have dozens of friends who swear by the stock market and blindly throw thousands into their Scottrade accounts based on what a Yahoo finance article says. They are not interested in real estate investing because they 'don't understand' or 'don't want to fix toilets' or 'don't want to deal with any bad people.' I always smile and applaud them for investing, but I can't help but group them with those who show up at the craps table every night. Sure, you might make some money, and sure, you might have an idea for some good strategies on how to win money. But at the end of the day, you have absolutely no control over how you will make money on your investment.

So I ask you, BP friends--do you root against the stock market too, or am I just a twisted, pessimistic grump?

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Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes

11y

Only on payday when I am putting more money in.

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John Van UytvenPro Member
Property Manager · Oconee, IL · Member since 2014 · 536 posts · 202 votes
11y
No I don't root against the stock market. If I decide to start shorting stocks, maybe my opinion will change.
I do own a small amount of stock, and I plan to open up a ROTH IRA soon. Plus when I move home I will enroll in my new jobs IRA. Seems like I would be shooting myself in the foot if I was always rooting against the stock market.
After I become a full time real estate investor I will try to roll that over into a self directed IRA.
I think we should all invest in more than just real estate. Real estate is great, but only investing in 1 thing can open us up to a lot of problems.
It is easy to bash people for only having a company retirement account to retire on, but if we think real estate is the only way to go and all of our assets are wrapped in Real Estate. We are kind of putting ourselves in an awkward position. I do admit real estate investors in general are probably better off. We know how to analyze a deal, and can aim for cash flow.
What happens if there is another crash right before you want to retire and your whole portfolio essentially becomes worthless?
Maybe another way to explain it is with my Grandfather. He farmed his entire life, and I mean that literally. He was born in the house he lived in his entire life. I am 5th generation on this farm. My family has owned this farm for slightly over 150 years.
My Grandfather was semi-retired and farmed until he died a few years ago. He was 86 years old and was cutting hay 3 days before he died. He had no stocks or bonds. He couldn't really afford to completely retire. Everything he had was financially in the farm.
That worked for him, because even though he was 86, he was healthy. He never had to live in a nursing home. A few differences in his health and he would have lost everything.
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Account Closed
Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
11y
Only on payday when I am putting more money in.
2 Reply
Rodney Kuhl
Rental Property Investor · Fishers, IN · Member since 2013 · 381 posts · 69 votes
11y
I don't root for the stock market to go down. But I definitely pay less attention to it nowadays. I will say, days like today when the market is free falling doesn't affect me much anymore..... I still collect a rent check every month whether it goes up or down.
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Robert Leonard
Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
11y
Congratulations @Account Closed ! You, my friend, understand a little something about the stock market that a lot of people don't. If you are still buying, volatility is a good thing, because you get the benefit of dollar cost averaging.
Sooo many people follow the media hype about what the stock market did on one day and they act like it means something dramatic. The other day I saw one channel show in big bright numbers "if you had $90,000 on September 30, today it's worth $87,000!" Oh my, the sky is falling, the sky is falling! It's complete nonsense and they scare the crap out of people who should be putting their money in the stock market!
I've always invested in the stock market and I always will and I want it to go up and down during my investing years. That way, I'll end up with more shares at the end, than if it went straight up and never had declines. Declines are like a sale for those who continue to invest. A point that David clearly understands!
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Sharad M.Pro Member
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
11y
I root for stock market to go up, because when the market starts going down, investors start looking at other investments and real estate is generally the # 1 alternative to stock market and that means more competition from other investors.
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Paul S.
Investor · Valparaiso, FL · Member since 2014 · 374 posts · 76 votes
11y
I have some stocks but I do not really watch it that much. I have my automatic sells set up so I can recover my initial investment but I think there are much better vehicles to park you money in. I like what @Robert Leonard says about dollar cost averaging. I have an annuity, Roth IRA, and a Roth TSP for myself but I have also started Roth IRA's for my children ages 18,3, and almost 1. (Yes they have earned income) I think @Sharad M. makes a valid point too that when the market goes awry then people look to real estate. There are plenty of opportunities out there but the less competition I think the better deals I would be able to find. Bottom line I like the fluctuation but would not like to see anyone lose big time in the market.
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Landon Elscott
Investor · Newton, IA · Member since 2012 · 89 posts · 39 votes
11y
No, I think the stock market is a relatively good concept - even if it's often negatively affected by panic. It allows people to invest in companies and I think that's a really neat concept, especially if people are willing to take some time to understand the fundamentals of the companies they invest in. I often think it's unfortunate that the market can be so volatile from either fear induced panic or exaggerated hype, but overall I think the core concept is worth being a part of or at least diversifying into. That said, I don't really need to root against the markets, the market naturally corrects itself time and time again for a variety of reasons - natural and unnatural.
I certainly think there are some companies trading at valuations far and above a realistic price point, but I wouldn't necessarily say I'm rooting against them. I also guarantee there's companies out there performing financial schemes that's probably not in the best interest of shareholders, but again, I'm not going to just root against them and hope they fail - I just avoid them for my own investments. It's the people's responsibility to due some due diligence, and sooner or later I think the market will in fact correct itself for those securities, but I'm not one to risk shorting a stock based upon my opinion that it's over priced - even if the financial reports propose that.
Most of my securities are actually ties into some REITs. I know that sounds probably cliche to invest in real estate investment trusts as a member here, but I really do think the REITs I've invested in are sound - although Inland Real Estate company has been having some issues lately regarding their commission structure on internal sales that are apparently costing shareholders more money, but it seems like the funds are still remaining within their umbrella of real estate companies...hard to explain.
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Jesse B.
Real Estate Investor · Cheyenne, WY · Member since 2014 · 71 posts · 37 votes
11y
I think it is bad karma to root against anything. But it doesn't bother me when the stock market drops...especially since it is my preferred way of investing money...only in dividend paying stocks that consistently grow their payouts. I hope everybody makes a killing in their preferred investment strategy :) then you can but me a beer!
1 Reply
Jesse B.
Real Estate Investor · Cheyenne, WY · Member since 2014 · 71 posts · 37 votes
11y
@Sharad M. Interesting you think that most people look to real estate when the stock market is dropping. I only look to real estate when I feel the yields are significantly higher than the stock market, i.e. when stocks are over priced (at least for my taste.). So from my point of view, when the stock market is dropping I am less likely to invest in real estate.
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Jon Klaus
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
11y
Rooting against the stock market is the same as rooting against the economy. I prefer to see the economy grow.
1 Reply
Justin Matthews
Greenbrier, TN · Member since 2014 · 6 posts · 0 votes
11y
Not really sure why the stock market is looked down upon. There are clearly advantages, especially in the internet age such as much lower transaction costs. In some ways I have more control over my stocks than real estate. I can literally sell my holdings at any hour of the day or buy more at any price for $7 a trade. Just this month I have made over 20% in an airline stock I bought in the midst of the Ebola scare. I bought this when I was on vacation at the beach.
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