Platinum Swing Trade Alerts

The 10-Buck Broker (Long-Term Stock Picks)

Microcap Millionaires (Penny Stock Newsletter)


No announcement yet.

Best Time to Invest in Stocks

  • Filter
  • Time
  • Show
Clear All
new posts

  • Best Time to Invest in Stocks

    The issue is not really the best time to invest in stocks; but rather the best time to invest in stocks more aggressively. To succeed in stock investing, there are two basic signals you should watch. They can tell you when to invest more heavily in stocks and stock funds... because they are selling cheap.

    Average investors should invest in stocks or stock funds on an ongoing basis, allocating a percentage of their total investment assets to this class of investments depending on their risk tolerance. Sometimes when the stock market makes you the most uncomfortable, it's the best time to invest in stocks and increase your position there. Many investors do the opposite. They sell near the bottom, take a sizable loss, and lay low until the market is well on its way to recovering past losses. That's a stock investing recipe for losing money.

    If you were an investor in 2002 or in early 2009, you know what discomfort and the feeling of financial panic are. It's not easy to force yourself to buy when everyone else is running for the nearest exit. Here are two things to watch for, to give you more confidence in making the decision to buy more stocks when they are cheap.

    First, you've got to follow a stock market major index when a falling market is making the headlines. Either the Dow Jones Industrial Average (the DOW) or the S&P 500 Index will do. If these have been down for one to two years it's time to pay close attention. If they are down 30% or more from the previous high it's time to get ready to buy. When selling escalates and prices then appear to be in a free-fall, it's time to START buying in increments.

    Second, pay attention to the P-E RATIO for the major indexes. This ratio of stock Prices to corporate Earnings, P/E, tells you whether stock prices are cheap or expensive relative to the profits or earnings that justify their value. For example, historically a P-E of about 15 has been normal for our major indexes. This means that the price of stocks in the index is 15 times the earnings per share recently reported by the corporations in the index.

    A ratio of 15 means that stocks are selling for 15 times earnings. As prices fall and/or earnings increase our ratio gets smaller and stocks are cheaper... and when prices rise or earnings fall stock prices get expensive. When the market's P-E gets higher than 20 times earnings it's pricey. At a P-E of 10 or less, stocks are basically cheap.

    The best time to invest in stocks and start some serious buying is when both of the above conditions spell STOCKS ARE CHEAP. When the major stock market indexes have taken a beating and the P-E ratio gets below 10 it's time to buy - not sell stocks and/or stock funds. Keep a level head and buy in increments with a plan.

    Trust me, you'll feel some discomfort. But stock market history will be on your side.

    A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

    Article Source:
    Platinum Swing Trade Stock Alerts(FREE 14-Day Trial)

    The 10-Buck Broker (Long-Term Stock Picks)

    Best Stock Picking Services

    Sign up for the forum to reply to this post!!!

    Best FOREX Signals Software

    Stock Market Investing For Beginners

    "Step into the arena and hold on to your hat. Don't get discouraged if you don't make 8 trillion dollars in your first month. Trading is not a get rich quick scheme. Realize that trading is a skill and just like any other skill it takes time to learn. Have convictions in your decisions in life and trading. Ignore the comments and "advice" of those that have never traded a day in their life."

    Good KARMA and positive energy abound.

    Terms Of Service

    Disclaimer: This website provides information about the stock market and other investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for informational purposes only. The Author of this website is not a registered investment advisor and does not offer investment advice. You, the reader, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.

    Promoted content: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this website and may receive commissions from purchases you make on subsequent websites. Always exercise due diligence before purchasing any product or service. This website contains advertisements.
    Best stocks to buy now Stock Market
    Best stocks to buy now
    Dow Jones TodayDJIA