World Musings

The markets this year have been down, recession is looming, and the threat of an economic collapse is in the back of some people’s minds. So, with that being said, is it a good time to invest? Of course there are many different ways to look at it depending on your financial goals, whether they are long term or short term. For the most part, I see stocks and mutual funds as being discounted, or on sale. So right now might be a good time to get in, as long as it is money that you do not need at all for the next several years. Or money that you can do without, but would like to invest. I look at it one of two ways from a long term standpoint. Either the dollar is going to collapse and become worth nothing, or eventually the market will start making gains again. So with your money out of the market, in a major collapse, you’ll lose it anyhow because you will be using it for toilet paper. There might be slow growth, or additional downturns, but gains will be made again one day. That could take years, so getting in while the stocks are discounted might be a good idea. From a short term view, of course the usual short term fixed funds, balanced funds, bonds, and cd’s are the safest way to go if you are pulling in retirement income or you need immediate modest returns. Investing in stocks and mutual funds with short term goals will leave you disappointed this year, even though just a year ago, it wouldn’t have.

Now, the trend is to buy low and sell high, right? Wrong. Not the new trend anymore. The up and coming new strategy will be to buy high, sell higher. It simply goes back to Warren Buffet’s advice: buy into good companies. They aren’t going to give you the monster returns that finding a lucky dollar or penny stock will, but these companies will always be around and will be setting the bar higher every year. They will always give a return. If you find a good mutual fund that has performed very well historically, I wouldn’t overlook it because it is selling too high, I would look at it as something that is going to go even higher.

As for myself, I got in earlier in the year when funds were slightly discounted. They did fall even further unexpectedly though, so I of course wish I would have gotten in a little later.  But I still consider it a good price that I got in at.  And I am staying in because although the downturn in the markets was unpredictable, any run that will happen will be as well.  I bought into a good performing emerging fund, at a slightly discounted price, with a long term goal. You can’t time the markets, but you can recognize good opportunities and make reasonable decisions.  Those reasonable decisions with emotions removed, usually turn out to be good decisions in the long run.