It’s December 2nd and my deposit processed this morning for todays trading to begin. I had a $100 deposit process into my Betterment account and was happy as usual on my timing. The day before the market took a pounding and I ended up being down 1.5%. I had a solid return on the dip. If you take a look at the chart below I zoomed in on the VOO which is the Vanguard S&P 500 ETF
So first we take a look at the entire week which during this period dates between November 25th and December 2nd. Look at that massive plummet due to oil prices on the 1st of the month. Incredible because on that day Apple also ended up down -3.25% and even today ended up being down another -.38% today. A lot of people think the sell off was due to people just taking profits, but also because Black Friday and Cyber Monday sales didn’t produce what share holders were hoping for. Which if that is the cause that seems a bit silly due to the fact that Apple rarely puts anything on sale. While I titled this buying on the dip their is know actual way of knowing if you are going to buy on the dip until the market actually opens. I just seem to get lucky and end up processing buys on the dip. These buys have brought me solid rewards though.
The S&P 500 is still looking for another 184 points to close out the year. Would be pretty awesome if it closed out at the projected 2200, but who really knows. I recently posted an article on Millennials in a Bear Market. A portion of it was about rising interest rates and trying to situate myself during that time period. I did a bit more research and the consensus seems to be that even when interest rates do rise the rates wont rise to anything above 2% and it will take a good amount of time to even reach 2%. So I do not think I have to sound the alarm that much. A lot of analyst think 2015 will be a pretty calm year, but thats fine hopefully it gives me a chance to situate more funds on the low and reap the rewards the following years.
On a side note I have decided that sometime in the near future I am going to open a investment fund specifically for Black Friday. Im gonna create it on Betterment and just set it to a target goal of $1000.
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.