If you’re like most investors, in the last few months you sold your stocks at the bottom and bought gold at the height or bought T-bills or stowed your money in a savings account. But the only successful response to a market decline is to buy; it’s always been a poor move to sell equities when everyone is in a state of panic. My advice is to take the cash you’ve stuck under your mattress and buy equities.  Here’s why:  96% of the 10-year periods since 1926 have been positive and 89% of the time, equities performed better than bonds.  Given these probabilities, the rational decision is that if you’re investing for  the long run, at least 50% of your money should be in a diversified portfolio of domestic and international equities. That’s the way to benefit from this crisis:  Buy low, stop watching the market on a daily basis and then rebalance to return to your desired equity allocation (in this example, 50%).

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Q :  Can you please provide specific and concrete steps for releasing the  limiting beliefs around money I currently have and replacing them with new and expansive beliefs.

A : The first thing is to become aware of your feelings during every financial transaction you make:  investing, saving, spending, talking about what dinner cost, giving your kids their allowance, responding to a charitable request.  What is your belief about money in every situation?

Now ask yourself:  what would your life be like without that limiting belief?  The answer to that question will be the seed for the creation ofa new curative money message.

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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  :

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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