To be honest, I have not felt confident in forecasting the direction of the stock markets for over a year. That is not me saying I don't know what's going on and throwing up my hands, but as far as "knowing" if stocks are going to be up a week/month/quarter from now I in fact do not know. While the markets have been UGLY and Painful as January was one of the worst months EVER in the stock market, and February has continued to be negative, I view lower stocks prices and markets as opportunities rather than something to be feared....I am in complete agreement with ANYONE who says that seeing an account value and the investments therein go down is painful and hurts to see; no one wants to see a decline or negative....what I have to keep telling myself tho is that investing is just that, investing. We are trying to find value and bargains in company stocks that will be worth more than they are selling for at current prices. Now the tough part is that sometimes (quite often actually) we see value in a depressed stock price and we think we are getting a great "deal" based on fundamentals and how well the company is doing. What's annoying and frustrating (along with a bunch of other negative words) is that a lot of times the stocks keep declining in value. This happens for several reasons. Sometimes the overall economy is worse than expected or takes a turn for the worse or maybe things that seem distant to us affect/effect stock prices (such as the price of oil, the weather, politics, worldly affairs such as rifts between countries or terroism). ALL of these things play into the price of stocks/investments but the thing to focus on is will a certain investment, if appropriate research is done, which is bought today will be worth more down the road at some point in the future.
That right there as they say "lies the rub"....the longer time frame you have to invest your money the more you can put it in things that have a better chance to grow as opposed someone who hasn't saved enough or is drawing on their accumulated savings needs to be slightly less looking to grow their money and more about conserving their money. My point is writing all this is to empathize with anyone and everyone who is frustrated with the lack of performance and poor action we are seeing in the stock markets. The only place that investors have been able to hide from the losses in value we have seen has been to not be invested but to sit in cash (which cash is actually a good investment from time to time).
As hard as it is, be patient, remember that over the past 80+ years the stock market has returned ON AVERAGE 7% a year (this includes years when the markets crashed and years when the markets were up big). It's tough out there, but this too shall pass...
