11
Feb
2009
Investing in stocks during the crisis – madness or bargain?
Is it reasonable to invest in stocks when the crisis progresses? Why should you risk your money an go against the current? Actually, it is a good idea to do behave differently than other people. Currently everybody is selling. It is surely one of the best periods to invest in stocks.
First of all, remember about the famous Warren Buffet’s quote: „attempt to be fearful when others are greedy and to be greedy only when others are fearful.” At the moment, stock market is filled with fear and many investors are convinced that the world has ended for them However, it is not quite so. The economy and the market will undoubtedly recover even if it takes longer than anticipated. Terefore, in times of economic crisis like the current one you are advised to benefit from the attractive prices and fearful atmosphere on the markets.
Obviously, this does not mean that you should invest your resources in companies with bad outlook. Remember tah before making a major, long-term investment, you must do some research and find companies that have strong and experienced management teams, positive track records of profitability and growth, and innovative R&D.
Although you may not find incredible bargains, there are surely some interesting bargains available to patient investors who focus on gains over the long term. There are many companies that the general market has dragged down to very low prices in spite of their great product lines.