How a value investor should invest nowa value investor should look at small capsWhen is the time to start again investing when the market is falling? This is a question that many people are asking themselves since they are probably losing money in their IRA or mutual fund. However while most people may not believe it, NOW is the best time to invest because there are opportunities in the stock market that we won’t have again for years. Most people want to invest the money they have when the market is going up like everyone else, but as we know MOST people don’t make money investing in the stock market. It stands to reason that NOW is the time to invest because not only are stocks way cheaper than they were, but we are also doing the opposite of most people whom usually lose their money are doing. As stated by professional opinion, it’s all about buying reasonable companies at a reasonable price- i.e. a value investor. It is true that there are some companies that are still a reasonable price when the market is going up however there are way more stocks that have depressed prices when the market is going down like it is now. Not only that many stocks pay much higher dividends than they used too thanks to the fact that the lower a stock goes in price, the HIGHER the dividend it has too pay to shareholders that are buying it as long as the company continues to make money. retiring plans The fact is nobody can predict the BOTTOM of the market, but it is however possible to know if a given stock is undervalued. If value stocks remain the same fundamentally, with the same earnings, assets, and revenue and the price has gone down, you should buy MORE of it until it eventually HAS go back up again to it's real intrinsic value. Warren Buffet has said many times never sell a good business you own unless something has FUNDAMENTALLY changed with the company, not the share price. If you follow this rule you shouldn’t have a problem with wondering when to buy or sell. The selling is done for you simply when the business that you bought is no longer fundamentally sound like it was when you first decided to buy it. Think about it, if you truly own an amazing business that can outperform its competition why would you EVER sell? An Even better question that a value investor must ask is why would the people who founded the company ever want to sell? competative edge stocks |