Posts Tagged ‘invest in stocks’

Buying Stocks Now- Throwing Good Money After Bad or Smart Investing?

Posted February 26, 2009 by Bernz

It’s now official. The American economy is in recession. The S&P 500 index- a broad-based thermometer of the health of American corporations- has declined almost 50% in the past 18 months.

stockmarketThe volatility of the stock market in the current recession has touched the majority of households. Investing in stocks was once the privilege of the rich, but today, many retirement plans, especially 401(k) plans, contain stock-based mutual funds and the values of these funds have dropped precipitously.

So why would anyone want to buy stocks right now? Surely, it’s time to tuck your money under your mattress and wait it out? Smart investors know better. They are using this time of market fear to pick up great values in stocks. The one thing that stock market performance has taught us over the past eighty years is that it always goes back up. Even in times of economic crisis (remember Black Monday?), the stock market always finds its bottom and begins its climb once again. Over time, the stock market has outperformed any other investment vehicle.

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