In Feb 2008, I wrote about the stock market being “ripe for the picking” as it heads down to 2005 levels with S&P500 Index falling below 1,300. The 3 major indexes have been going up and down over the last 6 months since I wrote and the S&P500 hit a low in July. Last night, the S&P500 Index went down 38points again to 1236, a level we have not seen in a long time.

One of the greatest advise I learned in investing is, “Be Greedy when others are Fearful, be Fearful when others are Greedy!”. Obviously in a Bear market like this, fear is in the market causing people to dump stocks. This would be a great time to be greedy and go in and pick up some stocks at bargain basement prices. However, you still have to tread carefully as the market may not be at rock bottom yet!

In fact, the level you see above, is equal to levels in 2005 and may be a good time to get into the market with some good selected stocks.

As I write, all the 3 major index futures are going down, signalling that the actual index may actually fall further when the market opens. In any case, get ready some free cash to capitalise on this coming opportunity because such opportunities does not happen all the time. In fact, a recession happens once maybe in every 7 to 10, so don’t miss this one…

The issue is not whether to buy but what to buy. Finding the right stocks to buy is always an issue, even during a recession like that. Keep in mind that you are not trading but really value investing, so look out for value stocks trading below its intrinsic values. I guess a blog article is going to be way to short to go into a description of how to choose value stocks… but make sure you find some good books and get some good advise. A great book I can recommend is “How to make money in Stocks” by William O’Neil.

Happy Investing and beat the Bear Market!

Bookmark It

Hide Sites