Anybody watching that Dow today?

Yes.  Watching and cringing, watching and cringing.

Kind of looks like the COJ Gutter Slide that we tend to reference.

Just the occasional reminder of how inter-related our investment structures really are.

From what I've read we have gone over 1000 days without a 2% "correction."  That's the second longest streak we've had so traders may be looking for something to act on.

I'm loving what it's doing to mortgage backed securities.  We're up 28bp's today.  Mortgage pricing should be pretty good tomorrow which means I can give some good deals and make a little extra cash all at the same time.

Anybody in Wisconsin want to save some cash?

The first part of Peter's reply (above) gave me hope --

see I'm really just a hippie scientist with a 401K but no clue on general market trends, so I was almost in panic when I heard a 500+ point drop in the Dow

-- but the second part of his post made me cringe. 

I used to check my 401k balance every day.  I have since realized that is not a healthy habit...  401k's and IRA's are great--just set it and forget it.

We're not at our wost levels of the day right now, Dow is down about 340, was down 500 as jszat said above.  That said, I don't think the market is done correcting.  Most of the money that comes out of stocks in a situation like this goes into bonds.  This results in better mortgage rates.  Gotta stay busy with mortgages and not pay attention to my retirement accounts...

Well, more watching the S&P than the Dow, but yeah, I've got CNBC on every day.

We're overdue for a correction, and China's overnight performance was a good instigator. Remember, this is just one day and a correction <> extended bear market.

I think there are going to be some good buying opportunities this week.

Yeah...I work for a major Financial Brokerage company...it's been all over the place here.  Ho hum...

The comment i got here down under this morning was "China sneezes, the rest of the world catches a cold" - thats what they used to say about the USA  (comment from a guy I work with)

Interesting.  I haven't really had much money to invest since the last "correction", so I haven't paid too much attention.  I've been socking away my savings and paying down my debt.

But Eric just recently opened a 401k acct (he has other retirement savings, just hasn't been inspired to take part in the company plan).  When he was doing his research he got a lot of advice from his step dad, who told him "The market is due for a big correction, so until that happens, put all your money into bonds."

Hmmm... seems he might have been right.

Makes me wonder, though... since I'm setting up my own 401k (just started a new job)... maybe this was the correction, and now it's time for me to get back in?  Or...

There will probably be some followthrough on the downside through the rest of the week. But a 401K is such a relatively long term investment, trying to time your entrance isn't nearly as critical as if you're doing shorter term trades.

(Note, not a financial adviser, nor do I play one on TV or BT.)

I think there might be something slightly lost in the translation of what the Chinese government put out. They're looking to curb foreign investment (cause there are a LOT of foreign dollars in their market) and the use of margin/loans to invest with Chinese investors. I think it's the margin/loan part that is what they're talking about as being "illegal" - somehow I don't think your emerging markets fund is running afoul.

It was another good reminder that markets do not like talk of capital controls. There was another market where the government came out and said something similar in the past year and overnight their market seriously tanked - I can't for the life of me remember which country it was now.  (They quickly backpedaled on the statements after seeing what happened.)

He is still a very much loved economist/guru/whateveryawannacallhim. It could have been a contributing factor sitting in the back of the fund managers heads as they traded today.

However, I think today definitely locked in some interest rate cuts down the line.

Oh yeah... I was just kidding anyway.  I have a couple of different funds that I get to choose from, and I think I'm going to mix it up a bit and have some high-risk and some slow-but-steady stuff in there.  And, like Peter said, put it away and forget about it.  

I watched and read yesterday with great interest the drop in the stock market.  The more I watch the market, the more I am convinced that the psychology of fear is the biggest determinant of stock prices.

Headlines like "Market drops on news of attempted Cheney attack" make me wonder... huh?  What does one have to do with the other.  People read the headline, say to themselves... oooh!  Stocks are going to drop!  I better sell!  Which causes prices to drop, and the thing snowballs.

What if everyone followed Warren Buffett's "buy and hold" strategy?  What if people did not allow emotion to rule?  It seems that stock prices would just go up and up.

Stock prices are like gambling odds... oddsmakers make odds based on what they think the public is going to do, not what they think the teams in question are going to do.  People buy/sell stocks based on what they think others will do, not the financial strength of the company in question.  Playing the market is legalized gambling, simply put.  Except that there is a guaranteed way to beat the house... buy and hold.  Period.

Fear rules in the market.  If people weren't such lemmings, we'd all make more money.  And I could go buy a tri bike.