They say “sell in May and go away” as the markets generally slip or slide sideway in the summer whilst the boys are larging it in the Hamptons.

Yes, there is a risk that the market will bomb soon and the question is how much panic selling this induces and then how far it falls. The good thing is that there is plenty of money out there to mop up bargains like an earlier guy mentioned which will soften the drop.

You might like to diversify and do what’s called hedging - i.e protect yourself a bit from a drop but leave yourself open to take advantage, albeit less significantly, from any further rises. The key is what are your financial aims for your portfolio? If your advisor hasn’t taken you through this stage and/or if you don’t understand the output then I suggest that you go over it again or switch advisor. He’s not totally off the wall with his view but the impact of his prediction on you will actually depend hugely on your perspective so no-one here can give you a more definite answer I’m afraid.

News articles about the stock market will not help you invest. You need to read a book called “A Random Walk Down Wall Street”. For a brief summary of the Efficient Market Hypothesis and the Random Walk Theory, download my free book at and go straight to chapters 7 and 8.

No one can know which direction the markets will take. Hence, you should not set up your investments based on where you think the market is headed. You should set your investments up based on your time horizon. If your time horizon is less than 5 years away, then you should not be in stocks at all, IMO.

Let me quote something from my favorite author, William Bernstein, in his book “The Four Pillars of Investing”:

“A young person should get down on her knees and pray for a stock market crash, so she can then purchase her retirement shares at firesale prices.”

If stock prices fall, stocks are cheap and future returns will then be higher. You do not want to sit on the sidelines if the market crashes. Let your investments ride and then continue adding new money to them, buying stocks at cheaper prices.

I am a Portfolio Manager with over a decade of experience in the Stock Market and I sugest you to stay away from bonds.

The economy of the United States of America is very slow but we are not in a recession yet.

You can invest in a few foreign companies (ADRs) where the Economy is actually growing fast and you will be fine.

You can also sell short a lot of bad companies and if the market goes down you will make money.

You could sell short Photronics (NASDAQ:PLAB) and you could make money if the stock price goes down.

According to MSNBC the Economy of the United States of America will grow in the coming months.

I also suggest you to fire you Financial Advisor.

If you need Financial Advice then drop me a line.
I will help you for FREE.

As you can see by the “answers” …there are many ways to get started, and many places!! If you go to :http://moneycentral.msn.com/beginnerguide.asp?page=introduction They cover many of the ” ways and places” and they have links to investigate funds and stocks, so if you do get started you have some idea as to where you want your investments to be.

I would suggest a couple of things. First read “The Little Book that Beats the Market” - this will help you learn the fundamentals of finding good investments. Then you want to see what the best investors are buying and selling. You can find this information at - this is a free site that lets you create a portfolio of stocks with $100,000 in “play” money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. There is also a charting feature , so you can see how your portfolio performs compared to the S&P 500.

Here are this month’s best traders:

When you are ready to start trading “real” money, then open an online account at Scottrade. They offer $7 online trades.

Good luck.

How does the stock market work (This link will answer half of your question):

Or search around

I think you want to know the difference between the Nasdaq - S&P 500 and Dow Jones industrial average(DJIA).

All three are made up of a basket of stocks. They are called indexes
DJIA has 30 stocks
S&P 500 has 500 stocks
Nasdaq has 3081 stocks

Nasdaq: Known for a vairetly of technology stocks.

DJIA and the S&P 500 are known for representing how well the U.S economy is doing. The stocks inside those two indexes represent the health of the economy.

The difference between the Nasdaq and the other two are the different stocks that are put in them to make up the basket.

Scottrade.

First of all, I would recommend talking to your parents and see if they know anyone that can help you get started. I do not know your financial situation, nor your age. But I will assume you are in your 20’s and make less thnan 110k a year. This being said I would consider a roth IRA.
They are also known as Individual Retirement Accounts. Its is a savings plan available to anyone who has a taxable income, but it is subject to certain eligibility laws. An individual can make contributions only from compensation income, which can include wages, salaries, fees, tips, bonuses, commissions, taxable alimony, and separate maintenance payments. It does not include incomes from pension or investments.

Although a Roth IRA is funded with after tax money and there is no tax deduction, it grows and earnings are withdrawn tax free in retirement. They are a popular way to save on tax. Also, there is no age limit to make a contribution to these accounts. This means that, unlike the Traditional IRA, with a Roth IRA, people over the age of seventy and a half years can continue to contribute funds to the IRA account. Also, it is not mandatory to make any minimum required distribution. Moreover, the contributions made to a Roth IRA are never tax-deductible, but they may or may not be tax-deductible in case of the Traditional IRA, depending on factors such as the individual’s tax filing status or adjustable gross income.
The amount contributed is nondeductible and so Roth IRAs, are the ideal way to enable your earnings to grow tax-free. In fact, the Roth IRA provides earnings that are tax-deferred and possibly tax-free. The contributions themselves are subject to tax deductions, but the distribution or withdrawals are not.
The maximum amount that you can contribute to this account in one year cannot exceed $4,000 or 100% of your gross adjustable income, whichever is less. To contribute to the Roth IRA, you need to have taxable income, and also the adjusted gross income should be less than $110,000 individually, $160,000 if you are married and file a joint return, and $100,000 if you are married but file separate returns.

Hope this helps…

The Nasdaq, the NYSE and affiliated exchanges and the AMEX and affiliated exchanges are the various US markets for stock.

The exchanges are double auctions. The highest bidding buyer competes other buyers and the lowest bidding seller bids against other sellers. Each trade is the result of an auction process quite similar to the “English” style auction you see at estate sales. There are two broad types of orders that can be placed there. A limit order instructs a floor broker to go to the “specialist,” the auctioneer, to bid to buy or sell a stock for you up to a limited price. A market order tells the broker to stand there and bid on your behalf until you are the high bidder if buying or low bidder if selling, regardless of the price you must pay.

The NASDAQ, or National Association of Securities Dealers Automated Quotation system, is not an exchange. It is more like a series of stores that sell stocks. Each dealer holds an inventory of stock and cash. The NASDAQ is the computer system that compares the prices of the stock you are interested in across stores and shows you how much inventory they have available and at what price. Like the exchanges there is a limit order and a market order. Unlike the exchanges, they work differently because there isn’t a direct auction. When you place a limit order you send a request to purchase out on the computer system to the various stock dealers and say you will buy a given amount of stock for a price up to a limit you set, or conversely sell. A market order is an instruction to pay the price the dealer demands for their inventory. It is accepting the sticker price, to use a car equivalent. If the dealer only owns 100 shares and you want 200 shares and place a market order, you will get 100 shares at the stated price and another 100 shares at whatever price the dealer has to pay to convince someone to sell their shares.

Your advisor is correct on these points:

-equities are indeed at all time highs (well, the Nasdaq’s still not quite there, but that 2000-time-frame peak was an abberation)
-the market will almost certainly have a correction in the next six months
-the market is often flat or a little down in the summer

However, timing WHEN a correction will occur is difficult. If you are investing for the very long-term, then you may be just as well off ignoring the correction. That is, if it IS a correction and not a severe market breakdown (like ‘87 for example). But even given that, your advisor may still be steering you right if — depending on your age and expected retirement date — he feels that you’re overinvested in stocks.

P.S. you may want to contemplate moving that portion of your money into money market funds or cash equivalents instead of bonds — the bond market may not be too good in the next 6 months either.

Online sites that I check regularly: