With Central Bank’s all over the world making the decision to buy stakes in privately held banks along with statistics showing that most investors have capitulated by the end of last week (more money was liquidated from equity mutual funds last week than any other week in the last few months, which just goes to show that left to our own devices, human beings as a group prefer to sell low than to sell high), this is an excellent time to let go of your own money madness and invest.

In other words, if we examine the investing world objectively without our emotions (which hardly ever guide us wisely in crisis situations), we find that everyone who bought in past situations like this made a fortune in the subsequent 10 years.  So instead of thinking about what might happen, think about the common sense wisdom of buying low, which has always, always worked, and buy a diversified portfolio today.

Some other blogs I found about investing now  :

Each day we read about what our economic leaders are doing to repair the economy.  We read about the candidates’ economic plans and how they differ.   But as investors these are not the people to watch.  Sure, Bernanke and Paulson have  made their share of right moves and wrong moves over the last few weeks.  There are reasons as citizens we should be informed about what the candidates are saying about the economy.  But as investors, we must not wait for the economy to rebound before buying low right now.  The economy will likely take time to recover, but markets always rebound before the economy does.

It always puzzles me that most people can appreciate a good bargain—except when it comes to stocks.  When ladders and light bulbs go on sale at Home Depot, people buy.  When stocks are on deep discount, people run for the hills.

Be consistent.  We all love a bargain.  So take that wad of cash out from under your mattress and invest in your future.

Some other bloggers thoughts on the buy low / sell high concept :

How will this bottom out and will it sit at the bottom for days, hours, weeks , or months?

Despite our financial problems in the US, Europe and Asia are experiencing as bad, if not worse, a crisis.

Traditionally the US has been seen as a safe haven.  This is still true and that’s why people are buying US treasuries; they are still considered the proverbial safe–money under your mattress as it were.

Gold and silver have come down because the dollar is getting stronger and people are buying dollars instead of gold and silver.  A stronger dollar diminishes the value of gold and silver as a safe haven.

Brian, it’s hard to say how long this will last.  This recovery will be quicker than that of the Great Depression. But it still may last a few years.

~Spencer

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