Is This the Market of a Lifetime?

Posted March 25, 2009 by Bernz

It’s difficult for even the best prognosticators to get a handle on the stock market these days. The massive recession-that-might-be-a-depression that has gripped much of the industrialized world has brutalized stock markets in the US and abroad. Pension funds, college funds and savings accounts have all been hard hit. Recently, CNBC’s Jim Cramer took a verbal beating from Jon Stewart about his inability to predict the crash.

lifetimestockThe Dow Jones Industrial Average has dropped to its lowest level in 12 years recently and continues to test that limit. But even with all of the warnings about the dangers of the market right now, some wise investors are in collection mode.

So, is there opportunity in the stock market right now or only grief and despair? Optimists point to the fact that all stocks are getting punished regardless of their fundamentals. That means that there are stocks that are currently undervalued lurking out there. The tricky part is finding the ones that will both weather the remainder of the recession and also do well when the markets turn around.

When searching for value in today’s markets, look for stocks that are somewhat recession-proof. Recession-proof products include those that people will need regardless of the economic downturn. People will always need groceries, personal care products, diapers, dish soap and even cigarettes. Although the stocks of the companies that make these types of products won’t be as much of a value as more speculative stocks, they will still be a bargain compared to their book value.

stocklifetimeIt is important to remember that any funds needed for short term purposes should not be invested in the stock market. It is impossible to predict the bottom of the market and there may be more pain on the horizon before it gets better.

There are many value stocks in the market today that are waiting to be carefully cherry-picked by savvy investors who know that the stock market will rise again. Patience and diligent research is required to make the safest investments and to have the best performing portfolio when the economy recovers.

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Richard Russell: “A hard rain lies ahead” (Investment Postcards from Cape Town, 7/21/10)
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Timing the Market, Part III (All Allan, 7/20/10)
Read more on Mutual Funds, Dow Jones Industrial Average (DJI), Jim Cramer at Wikinvest

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This entry was posted on Wednesday, March 25, 2009 at 7:18 am and is filed under Financial Education, Financial Goals, Index Funds, Investing Basics, Investing Strategies, Stock Market Investing, Stock Watch. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “Is This the Market of a Lifetime?”

  1. investing stocks Says:
    February 16th, 2010 at 11:10 pm

    investing stocks…

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