Is sky diving similar to stock market ride? Biggest Drop in 3 months in May 2010

An article by Punit    No Comments

This may sound funny on the first read. But really, is the stock market ride similar to sky diving? Wondering why I say that? Well check out the market from today, there was blood everywhere! Dow Jones slipped by 224 points or or 2.02%. Please keep in mind that its the steepest drop in the market since Feb 3. Reasons for this sudden drops can be attributed to Greece crisis, Goldman Sachs crisis and several others.

When you lose 10% of your total portfolio value, doesn’t it feel like a free fall? Such a drop in your wealth makes you realize that this world is still a dangerous place where anything is possible. The point is you hear all these great stories about companies posting significant improvements in their earnings and their stocks plummets! Check out Yahoo, GS,  Citibank, all fall in the same category.

Well there is a positive side to it though! A careful investor would observe the market during these swings and get in while things are still low! So identify the patterns and get in as things start to start their journey towards north.

One word of caution at the end, take your steps carefully do NOT put your entire life’s savings in the stock market, please!