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« Are Your Kids Really that Important to You? | Main | Keep Investing During Market Declines, Part 2 »

February 01, 2008

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I completely agree with you.Also, I am doing the same thing in regards to investing more than usual. If I like the fundementals of a company when I bought it at $50 when it is trading at $32 I am going to load up. There are lots of company out there that are trading at a deep discount compared to P/E and book value.Most of the professional investors are not going to cash because that is more of a risk then the stock market. For individual investors it can be costly in terms of Comm.,Redemption Fees and taxes plus the commissions when you re-purchase.

I also agree. I went to a seminar once where the speaker used a really neat illustration to demonstrate this. He used a clock (you know, the kind with hands on it) and said that 12 o'clock was the market high and 6 o'clock was the market low. He then moved the hands around and showed that most people realize the market's in a decline, get scared, and sell at about 4 or 5 o'clock. So, they're selling almost at the low point. He then moved the hands around and said most people stop being scared about the market at about 10 or 11 o'clock and that's when they buy. They are buying at almost the high point!
It was a really neat illustration of how much money you lose by selling when you're scared and buying when the market looks not-so-scary. You should be doing it the other way around! When the market makes you scared, that should be the trigger to let you know that it's a good time to buy :)

I agree. I'm investing more than usual because of the deep discounts. 2008 will be an exceptionally profitable year.

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