HI all. I have been monitoring this thread for the past few days and would like to add my 2 cents. I went thru the crash of 1987. it was horrible. today, that crash is just a blip in the long uptrend of the stock averages. In 1987, "Portfolio Insurance" was the buzzword, as stocks fell, computers automatically sold portions of a portfolio to minimize damage. guess what. they all kicked in at once, and they tried to sell at market into a vacuum because they're were no buyers.
In the early and mid 90's Index funds were, and still are, the rage. Mindless transactions, put your money in and you automatically own an equal amount of all the stocks in the index. WEll, that actually has worked quite well. One fear I've always had was what if we saw large liquidations of index funds. then we have blind selling of the same stocks that were supposed to be our saviors.
My current fear has been that in severe market conditions, online traders would not be able to log onto their accounts and would be prevented from trading, be it buying or selling because of the overload. While this remains a concern, I am very heartened by the reliability that i have seen so far. I use Brown % Co, and except for short term periods in very fast markets on certain stocks, I would say that they have handled the volume remarkably well. As we have not heard of dislocations at the other firms recently, it appears that the online systems have been beefed up to handle volumes even larger than what we have seen. Larry |
