Youth Politics

No, the Stock Market didn’t go 12 years into the future; we’re looking at a US stock market that has lost 12 years of gains in less than 6 months. At this rate I’ll be able to catch up to my parents’ 401Ks pretty quickly.

There have been a lot of items to discuss lately. The economic stimulus package was passed and it seemed like everyone had an opinion on the subject. I’ve seen talks of bipartisanship and how Obama has broken from that. I’ve also heard that Obama hasn’t accomplished what he said he would (although he’s only been in office for a little over a month). None of these items are currently on my mind. However, I have been paying close attention to how the stock market has been performing and, while the stock market is not exactly an accurate indicator of how the economy is doing, it does correspond quite well to the mentality of the American public at this time.

The market has now lost well over 50% of its value since last year. I thought that the market had already hit bottom, but it seems to be able to continue to slide. Now, it hasn’t deepened too significantly, and I’m optimistic that the market wont continue to nosedive. If you wanted to take the value of the market as an indicator of how the economy is performing, you’d be fairly accurate at this point. Looking at the trends in the market you can clearly see how people view the economy and what they predict the economy to be like down the road. It doesn’t look all that hot right now.

There are two factors that are preventing the recovery of the stock market and the overall economy. The number one biggest factor is consumer expectation. Everyone thinks the economy will continue to slump. As such, no one’s investing, and no one’s buying. No buying means no sales. No sales means companies don’t make money. The damage is self-inflicted, and we’ll continue to spiral downwards until expectations meet reality. Until then, expect further declines (but keep investing and buying!). The second factor is that of companies falling into bankruptcy. Now, I admit that this second part is mostly influenced by factor number one, however I feel that a lot of companies with bad business models have been able to stay afloat because the economy was just that good. Now companies with poor business plans are beginning to crumble, and as more and more companies go under, the others with sound business models will obtain bigger market shares and outlast this recession. I predict that once all of the deserving companies that go under do so, the stock market will finally begin stabilizing.

With all that said, how are my stocks doing?

My Google stock has declined 60ish points from last month. I’m still up from when I first bought, but not by over 100 points as had been true a month ago. I don’t see Google actually going away anytime soon, so it’s still safe to hold. It’s still over 40 points what I bought it for, and it wouldn’t be a bad time to put money into the company (it was over 700 a share last year and is now only 300).

Apple has had its ups and downs but for the most part it has been stable in the high 80’s low 90’s dollar range. Even the latest big slumps in the stock market haven’t moved the price of it’s stock too much.

Activision/Blizzard has been my latest gem. It had wobbled for a time to a price well under what I bought it for but it has been actually going UP in value during this entire period of declines in the stock market. The stock actually went up 29 cents today to close at a record high since I bought at $10.33 a share. It goes to show that this company is financially sound, has a great game plan, and produces high quality products. When all is said and done I’m sure that their stock is going to take off.

Those are my thoughts. If you have any questions about my stock picks or about the stock market and the economic recession so far, feel free to leave some in the comments. I’d also love to hear about your current investments in the market. If you haven’t gotten a chance, you may sign up to my RSS feed by clicking the link or subscribe to this site via email in the sidebar. Thanks for reading!