Is it Time to Start Investing Into the Stock Market Again?
The market has fallen over 40% since it's hay day back in early 2008.
401k plans has evaporated, there is talk of another Great Depression by most of the big media outlets, and the unemployment rate is rising at the fastest pace we have seen in two generations.
This is not to mention that the US foreclosure rate is higher than we have ever seen, the state of Florida has 7.
4% of all homes in foreclosure as I write this, and the horrific news is not just contained within the United Sates.
In fact, just about every other large economy in the world is facing problems, similar, if not worse, than what we here in the United States are dealing with.
Just look at Iceland for example.
The country is bankrupt, which has caused the government to crumble, quite literally.
So, with the Dow Jones hovering in the 7500-8500 range since the big collapse, is this a buying opportunity, or will we face another Great Depression, where this market could go down to god knows what level? If you are sitting on cash, which a lot of us are not, the way this economy has been, it may not be that bad an idea to start thinking about investing into the market again.
This is only if your time horizon is greater than 4 years into the future.
If you have money which you will not need for at least 4-5 years, then this is the simple strategy I would employ: - Determine How much money you are willing to invest.
(Should be a function of how much you can afford to live without for the next 4-5 years, combined with your risk tolerance.
) - Break this sum up into 20 equal parts.
For example, if you have $100,000 you want to throw into the market, break it up into 20 lots of $5,000.
- Every Other Friday for the next 40 weeks, you are to purchase $5000,00 in stocks - Make sure to diversify, not investing any more then 5% of your total portfolio in any one stock, and choose stocks which have high cash holdings, and little debt.
Every bear market eventually turns around, and in a good number of cases surpasses the previous highs.
Yes, it is possible to double your money within the next 3-7 years if you choose solid companies that will perform exceptionally well once the economy turns around.
There is a ton of money being thrown into the world economy by the governments of various nations.
It takes time for this money to jump start the economy, but mark my words, it will.
Many leading indicators have begun shifting into positive territory, hinting that within the next 3-6 months things will begin rebounding.
Unemployment numbers which are falling very fast, are in actuality lagging indicators.
Even after the economy starts picking up, the unemployment numbers will rise for at least another 3-6 months.
Be cautious, but also understand there are hundreds of great opportunities out there if you have the money to invest.
401k plans has evaporated, there is talk of another Great Depression by most of the big media outlets, and the unemployment rate is rising at the fastest pace we have seen in two generations.
This is not to mention that the US foreclosure rate is higher than we have ever seen, the state of Florida has 7.
4% of all homes in foreclosure as I write this, and the horrific news is not just contained within the United Sates.
In fact, just about every other large economy in the world is facing problems, similar, if not worse, than what we here in the United States are dealing with.
Just look at Iceland for example.
The country is bankrupt, which has caused the government to crumble, quite literally.
So, with the Dow Jones hovering in the 7500-8500 range since the big collapse, is this a buying opportunity, or will we face another Great Depression, where this market could go down to god knows what level? If you are sitting on cash, which a lot of us are not, the way this economy has been, it may not be that bad an idea to start thinking about investing into the market again.
This is only if your time horizon is greater than 4 years into the future.
If you have money which you will not need for at least 4-5 years, then this is the simple strategy I would employ: - Determine How much money you are willing to invest.
(Should be a function of how much you can afford to live without for the next 4-5 years, combined with your risk tolerance.
) - Break this sum up into 20 equal parts.
For example, if you have $100,000 you want to throw into the market, break it up into 20 lots of $5,000.
- Every Other Friday for the next 40 weeks, you are to purchase $5000,00 in stocks - Make sure to diversify, not investing any more then 5% of your total portfolio in any one stock, and choose stocks which have high cash holdings, and little debt.
Every bear market eventually turns around, and in a good number of cases surpasses the previous highs.
Yes, it is possible to double your money within the next 3-7 years if you choose solid companies that will perform exceptionally well once the economy turns around.
There is a ton of money being thrown into the world economy by the governments of various nations.
It takes time for this money to jump start the economy, but mark my words, it will.
Many leading indicators have begun shifting into positive territory, hinting that within the next 3-6 months things will begin rebounding.
Unemployment numbers which are falling very fast, are in actuality lagging indicators.
Even after the economy starts picking up, the unemployment numbers will rise for at least another 3-6 months.
Be cautious, but also understand there are hundreds of great opportunities out there if you have the money to invest.