That’s right, I had a grand in cash in my bank account burning a hole in my pocket, and so I did my patriotic duty and used it to buy stock, via the Vanguard Total Stock Market Index fund.
Why?
'Cause this is without a doubt the very best time in 3 years for a long term investor to buy stocks. Some of the downturn in the last week is rational, and sure, we have to assume that the recovery’s going to take longer than we thought it would. Airlines, hotels, and related industry’s are genuinely hurting. That’s the time to buy them.
Mark Mobius, of Franklin Templeton, is noted for advocating that one should do one’s investing when “blood is running in the streets.”
Ok, ok, ok. I know he didn’t mean the streets of New York City. But still.
Also, I thought it was a good time to do it, because I attended an editorial meeting at work, and all my financial journalist colleagues were lamenting the idea that they had 401k’s instead of pensions, and how we would all be so much better off if it were pension fund managers running our retirement accounts instead of ourselves.
Pussies!
Anyway, when this group of people, who’ve benefited so much–indeed, they have their jobs largely thanks to the democratization of the capital markets after 401k and IRA legislation was passed, started getting discouraged, and sentiment was overwhelmingly bearish, I thought now was the time.
I was going to do it anyway, even before the WTC attack.
From a technical point of view, I looked at a graph of stock prices all day friday, and noticed they were very stable all afternoon. Can it be they found some support?
I’m keeping another grand or so in cash. If the stock market goes up, I win. If it goes down some more, I get to buy more stock even cheaper, my average costs per share goes down, and in the long term, I still win. God bless America.
Who’s with me?
