For one thing, the $700 billion bailout of the financial sector may put some much-needed liquidity into the system, providing businesses with easier access to credit. That means it will be easier for these businesses to grow - and growing businesses are attractive to investors.
Furthermore, we are likely to see some new regulatory guidelines covering the financial markets - and these guidelines may help prevent a repeat of 2008.
Finally, many quality stocks are at lower prices right now. Typically, quality stocks are the first to rebound when the market recovers.
The investment climate may be brighter tomorrow - and you can find good stocks at lower prices today. So, if you continue investing, your perseverance may eventually be rewarded.
Don’t Wait For The Stock Market To Hit Bottom Before Investing
You’ve heard this classic investment advice: Buy low and sell high. But how low is “low”? Should you wait until the market hits bottom before investing?
In reality, it’s impossible for anyone to predict when a bear market will hit its lowest point. Still, we may be nearing the bottom, if history is any guide. Since 1950, the average bear market has lasted 13 months - and the current bear market is 12 months old, according to Ned Davis Research.
But whether we are near the market bottom or not, stock prices have already fallen considerably. A bear market tends to bring down the prices of most stocks - even those that represent strong companies with good prospects. Right now, you have a chance to buy these quality investments at good prices.
So, don’t wait until you are sure we have hit bottom before investing. Good opportunities are out there today - so take advantage of them.
Contact Wendell at Edward Jones www.edwardjones.com.
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