it's still the economy stupid

most people who know me know that i enjoy gambling in the stock market. i may even be slightly obsessed. of course, it helps that i've been doing well lately ... well at least relatively.

i have two goals while investing: 1) make money and 2) do better than the s&p 500 index. the first goal is obvious. the second is in place because even if i make money while investing in stocks, if i do not do better than the s&p, i would have been better off investing in an index fund (i don't believe in mutual funds). it would have been easier and a lot less time consuming. up until three weeks ago, i was succeeding with both those goals; unfortunately, the market tanked, and now i'm only succeeding at one of those. it makes me feel better though that "according to Morningstar (MORN), the average U.S. stock mutual fund is down 28.5%." that article is now two days old, and i would guess that those losses has increased since.

for the most part, i primarily invest in small cap companies. with that territory comes a lot of risk. you have to have the stomach for large swings up and down, and boy has my resolve been tested in the past few weeks. i've seen the price in some of my stocks be cut in half in the matter of weeks ... sometimes cut more than that. fortunately, i think my selection process is at least doing a bit right. i currently own stock in 3 of the top 10 small businesses, according to forbes.

saying the economy sucks right now is both pointing out the obvious and a huge understatement.

a week or so ago, when the market dropped a record-breaking 777 points, i thought maybe we had seen the worst. i took some cash, which i had set aside for non-investment purposes, and poured into a few stocks that i felt were greatly undervalued. i never intended to invest with that money, but i couldn't pass up the bargains (or at least what i thought were bargains). of course, the market has fallen a lot more since. there are some people that think now may be a good time to cautiously put some more money back into the market.

was it a bad decision? maybe. i definitely could have been more patient. if i had wait a few days, i would have been much better off. do i regret it? no. i'd probably make the same decision today. only time will tell whether it was the right thing to do or not. i'm hoping large gains with that money in the future . when? who knows. maybe a two years? a year? 6 months? sooner? i guess that's part of the reason for this post. sometime in the future, i'll be able to look back at this and decide whether or not i made the right choice.

all i know is that i'm glad i wasn't planning on retiring anytime in the near future.