Should I as a millennial be praying for the stock market to go into another mini correction, should I be hopeful for the market to drop 20% or even 30%? I see that Japan and many of the European states are under dire distress right now falling into recessions and just barely avoiding falling back into them. Japan is undergoing a triple dip right now and buying up as many bonds from America as possible. Germany and France just dodged falling into recessions again and Greece has pulled out of recession status by only a smidge. But over here in America…… things are on cruise control. The S&P 500 is setting record highs and on track to close the year at 2200 points. It puts a lot of stress on the economy and the businesses to perform well though. Seriously Apple makes up 3.62% of my portfolio and they are going rampant. I was not expecting Apple to climb this high this fast in such a short amount of time and quite frankly I don’t think very many people were. To give you a reality check Apple as a company is worth more than the entire Russian Stock Market which is just crumbling and falling to pieces. A Russian Rouble is worth only $.02 in America when converted and getting drastically close to only being worth $.01. With QE over and Federal Government set to raise interest rates in America a lot of analysts are projecting interest rates to rise in the middle of 2015. Which leads to the question I keep asking myself. Will America go into a Bear Market or will America be America and just decide to defy history and continue on into a bull market? The first 6 months are supposed to be extremely bullish but the following 6 months would be projected as entering a Bear Market. Interest rates rising cause returns to drop for every single percent interest rates go up, returns in the market drop the same. As a millennial though I would have to assume that while a large portion of our generation doesn’t have any money invested in the market those of us who do have some sort of income attached to the market should be interested in watching the market drop 10%-20% while we still are young. I am still brand new to the market but extremely fascinated with how it works. And for me as an individual to find a way to shine faster I need the market to drop while I am young for a couple reasons.
1. I need to see how the market responds and what a Bear Market is like when I am young.
2. I need to be greedy and unafraid while I am able to take a hit.
I was able to be apart of the the latest correction that occurred in the middle of October when the market just plummeted 9%-10%. That was pretty interesting because my deposit had just processed that day so I was getting a good laugh out of it. That 1 week of turmoil brought me my first returns of 2%, due to the fact that the market instantly slingshotted back the following week. I currently only have a little over $1100 in the market and will close out the year around $1500-$1600. Which obviously isn’t a lot, but interesting to me because I can see the power of what compounding interest does. I have been pretty fortunate to buy on basically every little dip.
I try not to look at the aspect of what and how much money I have in the market right now. I am more so trying to just save for the future. I have lived a pretty condensed life in San Francisco and am pretty determined to defy odds in this city even though it is the most expensive city in the country to live in. I tend to only pay attention to opportunities in front of me and avoid making or going into situations that simply do not offer any sort of important knowledge or opportunity for me. I think that is something that a lot of people in my generation fail to recognize. Seriously if I lived in Chicago or Boston or Seattle I would be on cruise control and easily have put twice as much in the market already.