What Happened In The Market Today?

If you haven’t already heard, the stock market had a massive rally today.

The Dow was up over 1000 points, which is the biggest one-day gain in history.

The S&P 500: up 4.96%.  NASDAQ: up 5.84%.

What was the reason for the move higher?

It was something called an oversold bounce.  When stocks go down at a fast rate, as they have over the last three months, they become oversold, and will rally in the way we’ve seen today.

Will this move last?  Unfortunately my answer is no, in the short term.  I’ve been watching the market since 1995; right now, we are still in a down trend.  Rallies like this almost never last, but they are part of the process.

I’m not trying to discourage anyone – far from it! –  but I want you to understand that the sell-offs are not over.

Now…if Trump announces that the trade war with China has been settled, all bets are off!

However, expect more selling in the immediate future.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

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How To Invest $1000 Today!

Do not let the action in the stock market discourage you from investing.

I repeat:

Do not let the action in the stock market discourage you from investing!

Some people will tell you not to catch a falling knife.  But that’s not what you’re doing when you invest.

I go into more detail on this topic in The Stock Market is For Everyone.  Here are some quick thoughts as we end the week:

If you need your money in the next year or two, then leave it alone.  We have no idea where the market will be in two years.

However, if your time frame is five to 15 years, continue to buy.  I know it’s very difficult to do!  But these are days on which you have to do it.

Now, how would I invest $1000 today?  Here’s how:

1. Buy a low cost S&P 500 index fund and wait.

2. Take $100 and buy 10 different stocks.  (See my videos here and here for suggestions.)

3. Take $200 and buy five stocks.  Or $250 and buy four.

It’s entirely up to you.

When the market is like this, you will almost certainly be down soon after you buy.  That’s the nature of the current climate, and no one can predict the bottom.

I do know that on average, the market is up two out of every three years.

Just hang in there.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *