You don’t have to be a financial advisor or a wall street vet to know that buying low and selling high is the answer to making money, it’s common sense. Right now the market is very low when compared to the last couple years so if you have the money now is the time to invest. Prices may continue to drop a bit but now is the best time to buy stock; buy low and sell high.
A lot of people are in a panic right now and think our whole economy is going to fall apart. Calm down people. Think about the last couple of years and the trend we saw in the stock market. Think about how quickly the Dow rose and how high inflation went. Stock can only increase so much before it's not worth the price anymore and that is what has happened. Things were going too good and now it has to level out. The Dow is now at the same level is was in 2003. What were you doing in 2003? We're you in economic peril? Likely not.
The media dwells on crisis, it’s like their tonic. Save yourself a lot of grief and tune them out. Watch the history channel instead, they don’t spend their time predicting what the market is going to do…it’s history they already know. The more the media dwells on the faltering economy the less people want to spend…the less people spend the less money companies are making, the less companies are making, the more people they lay off and the more people that get laid off the less people there are spending money… it’s a viscous cycle.
There’s another trend in the stock market that is important to keep in mind right now. This election is a big deal, we don’t have the choice of electing an incumbent therefore we are entering into the unknown (sounds epic… well it is really). The unknown makes people afraid and that fear is always reflected in the stock market. Once the election is over (regardless of who wins) things will settle down a bit (whoever wins the election will claim they are the reason the stock market recovered of course).
So my official advise to everyone right now… take a chill pill and buy stock if you can…
Thursday, October 9, 2008
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