One of the things that makes it hard for beginners to get started buying stocks is the intimidation factor. Just watch an hour of CNBC and you will hear all sorts of stock market terminology bandied about by anchors and guests all wearing fancy suits who sound educated and extremely knowledgable.
Its enough to stop a beginner in their tracks and make them give up before they ever get started.
Some of the fancy verbiage you will hear time and time again but may wonder what it really means. It all sounds intelligent (and even seems to make sense) until you really break it down and analyze it. These "sayings"/fancy words include:
1) "The easy money has already been made"
2) A stock is "overbought" or "oversold"
3) "You should buy on weakness"
4) "The market is in a bottoming process"
5) "There is a lot of cash on the sidelines"
6) "We are constructive on the market"
7) "Cautiously optimistic"
8) "Its a stock pickers market"
9) "Stocks are down on profit taking"
10) "We are taking a wait and see approach"
You can find more silly stock phrases in this very well written article that also explains why they are so meaningless. These phrases / words are used to make the analyst sound smart without having him/her commit to any real opinion.
The stock market has its own language and those in the industry who are out there on all the different media are good at using it to convince you, the homegrown average investor, that they are smarter than you are. In many cases they may be (about the stock market) as it is their job but I hate the fact that they often use such meaningless jargon while trying to make themselves look more "in the know" than they really are.
DON'T GET FOOLED BY THESE INTELLIGENT SOUNDING (but mostly meaningless) STOCK PHRASES
Is Dow 18,000 Just A Matter Of Time?
If you've been waiting for a significant pullback in the market to buy stocks, you have been waiting a long time. The market continues to defy gravity and that quick 1000 point drop we had at the end of September into the beginning of October seems to be long forgotten. Its amazing how stocks have kept going up since 2009, no matter how much uncertainty there was/is in the world.
For all those years, it has been quite easy to make money in stocks as so many of them have gone up. Tossing darts at a stock board really would have worked! But that can't last forever.
I think 18,000 on the Dow will happen, if not this year then real early next year. I just have the feeling we will get there. But after that, the hurdle over 18,000 might take a while to get over.
Take a look at the Dow chart below and see that every new 1,000 point hurdle is taking longer and longer to get over. 13,000 to 14,000 was real quick. 14,000 to 15,000 took a bit longer but still took very little time. 15,000 to 16,000 took more than double the time of the other two and 16,000 to 17,000 took even longer than that.
Depending how the elections go November on 4th, Dow 18,000 will probably come quicker if Republicans win both the Senate and House. That is because they are seen as being friendlier to business and lower taxes. But no matter who wins, I think Dow 18, 000 WILL happen within the next 4 months.
After that though, the euphoria may really wear off as investors decide to take gains and wait to see what the new year has planned. Nothing in world seems to be going to smoothly right now and fear about the economy (in many countries) as well as terrorism and wars may finally get the better of investors's unbridled optimism.
Disclaimer: Please remember, this is just my opinion and I hope I'm wrong and the markets continue to go up. But before you buy stocks or open any broker accounts, make sure you consult a financial planner or at least do your own homework so that you understand what you are doing.
