I admit that I don't know much about the stock market, but it seems to me that the time to invest is when it is down (as in "now"), in order to make a large return when the market recovers. However, whenever I see a blog or news article about the current financial situation, the consensus seems to be that we get out of the market while the getting is good. One would think that we had never seen bad times before; we all know that this is NOT the case, and that the economy has been in bad shape on previous occasions.
History has also proven that the economy usually recovers in better shape than it started out in. Consider that on:
October 19, 1987 (Black Monday), the DOW averge closing price was 1738.74 (Down 23%). One year later it was up 23%; and it was up 54% the year following that.
August 7, 1990 (Five days after Iraq invaded Kuwait), the DOW averge closing price was 2710.64 (Down 10%). One year later it was up 12%; and it was up 23% the year following that.
April 19, 1994 (Rising Interest rates in the USA), the DOW averge closing price was 3619.82 (Down 23%). One year later it was up 16%; and it was up 53% the year following that.
August 31, 1998 (Five days following the collapse of the Russian Ruble), the DOW averge closing price was 7539.07 (Down 19%). One year later it was up 44%; and it was up 49% the year following that.
March 11, 2003 (US Invasion of Iraq imminent), the DOW averge closing price was 7524.06 (Down 36%). One year later it was up 35%; and it was up 43% the year following that.
Armed with this knowledge, I feel positive that it is a good time to invest...but then again, I have already admitted that I am not a financial guru. There are many people out there who are wondering the same thing. So, my question is:
Should we be bailing out of todays market, or is there an opportunity here that we should be seizing?
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