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The Market and it’s ups and downs August 19, 2011

Posted by shaferfinancial in Uncategorized.
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Being an avid watcher of the market [its a great spectator sport] it seems to me that a post on the ups and downs might be useful. Sometimes you have to think that technology has reduced what has happened in the past to just that; history. I think that we are dealing with a slightly different stock market now because of the high frequency trading. This is, in my opinion, taking the normal emotional ups and downs of the market to a new level by making the variation more intense. In short, what would be a 1 or 2% move now is a 3 or 4% move because the computers hop on the back of the move and make it more intense.

Now this does not bother me, because I don’t react to these moves. Both my dividend producing stock, my Berkshire and even my equity indexed universal life remain fully concentrated on the long run where these movements don’t matter.

However, if you are planning to start positions, either by starting a dividend producing stock strategy or just increasing ownership of current stocks you can use this to your advantage. Wait until after one of these downdrafts pushes the stock down 3 or 4% and then purchase.

Bottom line is that we have to learn to live with the variation going forward.

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