A Good Time To Buy

     Timing your purchase decisions for stocks can be a fools' game. Why do I say this? First of all, nobody knows when this market will stop going up and reverse course. Everybody knows that it will correct but we just don't know when. If we all just waited for a correction to invest, we may miss out on some substantial gains. Secondly, just like playing the powerball lottery, you probably won't win, but you certainly won't if you don't buy a ticket. Anyone who is not in this stock market yet has missed-out on some impressive gains but that should not keep them out of the market's future gains. Of course, any new money entering this pricey market will be at risk from an inevitable correction. So how can that risk be mitigated? The easy answer is to ease your way into the market by taking small bites of your favorite ETF's or mutual funds. By keeping cash on the sidelines, investors can "average down" on these investments by buying more when they go on sale. Anyone who is saving for retirement through a qualified plan at work should certainly keep up their contributions regardless of the current level of the market indexes. A long term perspective changes the complexion of market timing. Many years ago, I was working on the factory floor and had managed to accumulate some extra money that I wanted to invest. I picked out about six stocks that passed my criteria for growth and income. I was ready to buy those stocks no matter what the market averages were doing. I can remember being ridiculed by my co-workers because at that time, the Dow Jones Industrial Average was setting a new all time high. That was 32 years ago and the Dow was at the lofty level of 1265. By comparison, the Dow was recently off its high and settled at 25,383. Gee, I don't feel so silly now! Believe it or not, I still own some of those stocks from back then. Of the ones that did really well, I sold some shares to recoup my initial investment and redeployed the money into new ideas. Not all my picks were winners but over a long time, the winners should make-up for the losers. That is why diversification is so important. My final thought is about having the right temperament for long term investing. Last year, I was preparing a lady's tax return. When I got to her brokerage statement, she told me that she had to fire her broker and hire a new one because she had lost $500 in one day.  Since we are not allowed to offer financial advice, I just held my tongue. If I could have offered my advice, I would have told her that she had actually not lost anything if she didn't sell. I would have also pointed out that fluctuations in a portfolio is normal and part of stock investing. Additionally, anyone who cannot stand the volatility of stocks should be invested in C.D.'s at their local bank or Credit Union.