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Do you invest and do you understand it?

Watching the President on Leno last night got me thinking.

Do you invest your money in the stock market? Do you have mutual funds? Do you have a 401 K? Do you have an IRA? DO you have a 529 for your kids? Do you day-trade?

Whether you answer yes or no, do you understand what it means to buy stock? Do you understand exactly what you're buying and how that price is determined? Do you understand the inherent risks in investing? Do you understand what it means when we say a stock is "overvalued?"

Now, who holds responsbility for the up and down in your portfolio? Do you own any responbility based on the choice to invest or not and how to do so?


Asked by Anonymous at 8:15 AM on Mar. 20, 2009 in Politics & Current Events

This question is closed.
Answers (11)
  • (cont) Similarly, investing is a lot like going to Vegas. The question here really is this - if you go in and plunk $100 down on a table and lose, is the loss your responsiblity for taking the gamble or the dealers fault for not giving you the right cards?

    The reason I ask is this - Obama's new sell is simply "Big bad Wall St. played hot and heavy with other people's money." BUT, that *IS* what investments are about. Wall Streeters don't steal your money away and have their way. They don't just slug their own cash in and watch it grow. They invest on your behalf. It *IS* all about someone else taking risks in hopes of big rewards with other people's money on their behalf. It made a lot of people -- lot of every day people -- comfortable in their life styles for a while and then, as the market will do, it corrected itself to reality with over valued stocks returning to normal and some stocks movign to undervalue.

    Answer by Anonymous at 9:16 AM on Mar. 20, 2009

  • I would have to say those with Pensions that are tied to stocks (ie: many teachers pensions are many oil and energy companies, etc) have less CHOICE on where to invest than I, who chooses when and where I put my money. HOWEVER, the market responds to the slightest hint of government intervention. If the Government would not continue to bai industry out, smaller corporations would most likely rise up through the rubble and prevail.  But too many in Washington feel certain businesses are "too big to fail", so they intervene. This hurts American Business, the stock market and those who invest (whether they choose to invest or are tied to a pension)


    Answer by grlygrlz2 at 8:25 AM on Mar. 20, 2009

  • Abd Yes I understand more and more about the stock market every day. I don't get into "day trading", but I do pick stocks for long term investments and accept the risk associated. What I don't understand is why the Obama administration downplays the stock market as nothing more than a mere campaign"poll".

    Answer by grlygrlz2 at 8:28 AM on Mar. 20, 2009

  • **and**

    Answer by grlygrlz2 at 8:29 AM on Mar. 20, 2009

  • We each have a Roth IRA.

    I don't know how much it's worth now, I stopped looking................

    Answer by mustbeGRACE at 8:29 AM on Mar. 20, 2009

  • We buy our own stocks and understand how the market works. I just use the weekly pizza money to buy them and make homemade pizza at home. we gained 136 bucks yesterday.

    Answer by plylerjones at 8:33 AM on Mar. 20, 2009

  • I used to invest, I understand it, and I pulled my money out when Obama took office.

    Answer by Anonymous at 9:03 AM on Mar. 20, 2009

  • Anonymous

    Answer by Anonymous at 9:04 AM on Mar. 20, 2009

  • Stocks are based in part on what people are willing to value them at. If enough of you deem, for example, General Electric worth more money than General Motors than the price of GE will trend higher relative to GM. The problem comes in when people over value stocks - when their perceived worth fails to realistically pair with things like revenue and total asset worth. This is what happened when the bubble burst. People were willing to value those stocks at high prices when in reality their total real worth was no where near what their per-share stock price reflected. Companies go public - offer shares - as a means to raise capital. It's like, to over simplify, the investing public making a loan to the companies they invest in. If you pay for your car than it's blue book value and you can't pay back you loan - your odds of making up the difference and paying off the loan are nil. Same with stocks.

    Answer by Anonymous at 9:13 AM on Mar. 20, 2009

  • My parents invest a lot, and they have accounts in my name that they are custodians of. It's their money, and I'm thankful they put some of it away for me, but I personally won't invest. It's too much like gambling for me to be comfortable putting anything into investments. I figure that if I save so much each month into a savings account, that can be our retirement fund. When my son is a bit older, I will open an account in his name and start putting money into that for his education. I like knowing how much money I have and where it is, and while I understand the benefits of investing, I'm too paranoid to put my hard earned money into anything other than checking or savings!

    Answer by trebelcleff at 10:27 AM on Mar. 20, 2009