Monday, May 10, 2010

A Stomach-Turning Drop

Last Thursday’s fast and furious drop in the stock market appears to have been influenced—at least in part—by a typographical error. The Dow plunged 1,000 points in five minutes before it partially recovered. A number of trades had to be cancelled because of errors related to technology problems.

Events such as this emphasize the futility of trying to predict the short-term direction of the market. We also shouldn’t read too much into this regarding where we’re going. As I have said many times, we’re entering a new economic era. We don’t know exactly what it will look like or how long it will take to get there, and many factors will contribute to the process. We just have to position ourselves as advantageously as we can, and let the process run its course.

Have a great week!

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