Stock market gyrations

I have been watching the stock market closely the last few weeks and all I can say after Monday's historic rise is that I have no clue what is going on. All I know is that it has been going down a lot and yesterday it jumped because of government intervention. I checked my 401K online yesterday and was very saddened by the losses. Oh well, you win some and you lose some, I just wish I did not lose so much.

It is a good thing that I am young and can delay my retirement for a while longer even if I do not want to delay it. However, I feel bad for those in retirement or near retirement who had their stock portfolios devastated by the recent market turmoil. Reading that retirement accounts had lost about 2 trillion dollars because of the decline in the stock market was shocking. And I still cannot believe how much has changed in the financial world over the last couple of months. Storied names of companies that have been around for decades or even over a century have been brought to their knees. It is a shame that the risky behavior of a few has hurt so many.

If the last decade has shown me anything in the stock market, it is that fortunes are made and lost quickly and that no matter how big the company, the company can and will fail. I remember earlier in the decade the collapse of Enron and Worldcom. I thought the collapse of Bear Stearns recently was an anomoly, but sadly, it was the start of something much worse. Over the last few months, seeing AIG, Wachovia, Washington Mutual, Lehman Brothers, Freddie Mac and Fannie Mae basically go out of business, I am not surprised the Dow Jones industrials dropped over 40% from its peak last year. Hopefully the worst is over and the market can behave rationally and inch back upwards.

I know that a lot of seniors and older folks are desperately hoping for a furious market comeback. I just think it is unrealistic for a complete turnaround in a short time frame. We may not see Dow at 14,000 for a few years. Though if you have some money, maybe it is not a bad time to invest some of that in a broad market index. As billionaire Warren Buffett once said, "be fearful when others are greedy and greedy when others are fearful" or something like that. Last week people were afraid.