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The Best of Times, The Worst of Times- Time to Invest?

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'Is this a good time to invest?' must be the dirtiest question in investment right now. Because it is asked so often that people in investment have heard all the answers right and wrong. More often than not, most commentators say something that makes them feel that they have put their feet in their mouths just a few days later.

So is it? I feel that it is a time to start looking for investment. As Sir Winston Churchill said after the end of the El Alamein Battle, "This is not the end, nor is it even the beginning of the end, but it is, perhaps, the end of the beginning." The financial turbulence should still be around before it runs out. 'When does it run out' is a billion dollar question.

I read an interesting article about one firm in Wall Street that predicted the previous down cycle in the late 1990s at the height of the Internet stocks boom. The article said that the analysts in that firm earned their salary that time, but the very same article said that the firm did not indicate a buy signal to the investors after their good advice to sell. And the stocks went up and up in the years after that. When the buy signal finally came, the bull run was already on.

One cannot time the market. No one can accurate tell the exact moment a market turns and confidence is restored. This fall in the market has run for a while now and I think that it is time to put some money back in the markets. How much? No more than 25% of the money slated for investment. Slow and steady wins the race.

An interesting article that I read on Seeking Alpha before writing this article points out potential risks and hazards appearing in the USA and the similarities with the Great Depression the current crisis has.

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1 comments:
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OLED said...
April 4, 2008 at 6:04 AM  

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