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Is Now The Time to Buy?
By JLP | March 8, 2008
The stock market continues to “test its lows,” as the TV commentators like to phrase it. As of Friday afternoon the Dow was down to a 52 week low of 11,894.
So is now the time to buy? If not, is it because you think stocks will fall lower or because they’ll simply trade horizontally for many months/years to come?
I’m a “buy and hold” sort of gal for the most part, via my 401k and Roth IRA. I don’t really invest much in stocks outside of retirement accounts (at least I don’t add to my current positions very often). Instead I’ve been focused on maintaining my EF for the last few years (which always seems to get depleted soon after I get around 4 months expenses saved up) and accumulating other reserves for the real estate purchase I recently made.
However just for fun on Friday afternoon I decided to kick $100 over to my Vanguard Life Strategy Growth fund. I have a small chunk of money in there, but I haven’t added much to it over the last few years. Many of the Vanguard LSG shares I’ve purchased were at higher levels than they’re trading now, so I lowered my average cost/share with the Friday purchase.
I don’t think the stock market will be down forever, and I’m certainly not considering liquidating any of my current stock holdings. But nor do I feel particularly led to stock up (no pun intended) on shares right now. Instead I’m feeling unusually conservative, and I think I’d like to have at least 6 months of reserves in cash before I even think of speculating on what the stock and commodities markets might do.
A lot of investors don’t know what to do with their investments right now. American stocks look bleak, so many professional and average-joe investors are pouring money into already booming markets such as oil, gold, international stocks, and other investments which in “normal” times are considered very aggressive and speculative.
As somebody smarter than me once said, when my taxi driver starts chatting about “hot commodities,” it doesn’t exactly make me eager to jump onto that bandwagon. Or something like that. So for now, I’ll let my 401k continue to dollar cost average for me, and I’ll keep the rest of my savings flowing into my Vanguard Prime money market fund.
What are you doing with your investments? Staying the course, betting on a particular sector or stock, liquidating?
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Topics: Investing |