Comments on: The Flash Crash: Why we panic and how to avoid it http://www.popeconomics.com/2010/05/19/the-flash-crash-why-we-panic-and-how-to-avoid-it/ Sat, 21 Jan 2012 19:01:48 +0000 hourly 1 http://wordpress.org/?v=3.1.3 By: Kyle http://www.popeconomics.com/2010/05/19/the-flash-crash-why-we-panic-and-how-to-avoid-it/comment-page-1/#comment-427 Kyle Thu, 20 May 2010 15:33:51 +0000 http://www.popeconomics.com/?p=1054#comment-427 Good to see you back. I was kind of able to do this during this crash. I graduated from college 3 years ago and I didn't have money to invest until the crash was underway. I bought my first stock in September, 2008, thinking the market had already crashed pretty hard. It kept on crashing, but thankfully I kept my money in stocks and ended up ahead of the market. The same thing with my house. I bought it in March, 2008, thinking the housing market had already plummeted. Obviously it kept plummeting and I bought too early to qualify for the first time home buyer credit. I still hope I'm going to end up coming out ahead when I go to sell. Good to see you back.

I was kind of able to do this during this crash. I graduated from college 3 years ago and I didn’t have money to invest until the crash was underway. I bought my first stock in September, 2008, thinking the market had already crashed pretty hard. It kept on crashing, but thankfully I kept my money in stocks and ended up ahead of the market.

The same thing with my house. I bought it in March, 2008, thinking the housing market had already plummeted. Obviously it kept plummeting and I bought too early to qualify for the first time home buyer credit. I still hope I’m going to end up coming out ahead when I go to sell.

]]> By: Rob Bennett http://www.popeconomics.com/2010/05/19/the-flash-crash-why-we-panic-and-how-to-avoid-it/comment-page-1/#comment-424 Rob Bennett Wed, 19 May 2010 18:33:24 +0000 http://www.popeconomics.com/?p=1054#comment-424 <i>we say we’d buy more stocks if the market plummeted. But when it actually happens, we all sell stocks.</i> Not quite all of us so that. It depends on how much you lose in the crash. If you have a low stock allocation before the crash, it is easy to buy lots of stocks now that they are priced better. If you lost lots of money in the crash, good luck with the idea of now buying more of the asset class that caused the losses! Buying when prices are better makes all the sense in the world. But it won't work unless you <i>prepare</i> for the crash by lowering your stock allocation. It's the decision to go with a low stock allocation prior to the crash that permits you emotionally to go with a high stock allocation following it. Rob we say we’d buy more stocks if the market plummeted. But when it actually happens, we all sell stocks.

Not quite all of us so that. It depends on how much you lose in the crash. If you have a low stock allocation before the crash, it is easy to buy lots of stocks now that they are priced better. If you lost lots of money in the crash, good luck with the idea of now buying more of the asset class that caused the losses!

Buying when prices are better makes all the sense in the world. But it won’t work unless you prepare for the crash by lowering your stock allocation. It’s the decision to go with a low stock allocation prior to the crash that permits you emotionally to go with a high stock allocation following it.

Rob

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