Tuesday, September 16, 2008

I Feel I Must Address The Current Market Situation

Yes, this is the fall and yes, we are in a bear market. Is this is a great time to buy stock? Yes, it is. However, do not bottom-feed for stocks, change and your mind and sell. This is how you lose money. If you buy anything, buy something that you can live with for at least 3 years.

There can still be a lot of volatility. You can buy a good stock and the stock can still go lower. Be prepared for this. After all, this is only mid-September. The selling off season is not yet over. Is it the bottom? Who knows? The only thing you can know is if the market is relatively low or relatively high or somewhere in between. You do not know anything else. No one does. So at the moment, it is relatively low.

What happens in bear markets is that everything goes lower. Some stocks go much lower than others do. What you want to buy is something relatively good at a relatively low price. Where are we currently? We are about the same place we were in January of this year. This is about the same place we were in November 2006. Do I regret holding stocks when the market is low? No. I have collected a lot of dividends in the mean time. My dividend income has gone up.

If you are investing in stocks, you have to learn to ignore this time of the year. If anything bad is going to happen, it will be in the fall. And just to put it all in perspective, we are back to where we were in November 2006. Not all has been lost. Buy in the fall and sell in the spring. This will work 9 out of 10 years. Have some fun and buy some stocks.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.

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