As noted last week, we've been watching for signs of capitulation; margin calls, bear market headlines, special one hour television programs dedicated to bear markets, magazine headlines, the whole shebang, and we are getting it and then some.
If you are a long term investor, seeking to grow your wealth, hoping to beat inflation and taxes, the way to success is through equities. Unique buying opportunities come around every now and then, and today is one of them. It's funny and perverse in the investment business, folks think about selling stocks after they have declined 20%, but when searching for bargains in the "real world," they wait for the after Christmas sales and other so-called big mark down events, but when it comes to the stock market, they buy when it's high and sell low. Perverse, huh?!?!
The time is now to get involved, if you have cash, you deploy it, thinking in 3, 5, or 10 years, that your stocks will perform better than bonds and cash. Don't forget, the market sometimes likes to re-visit past lows and put in a double bottom, so watch closely to see how the market trades and we don't want it to get ahead of itself. History of market bottoms tells us that they usually re-test lows, and then expand from there. So this mornings lows might be re-visited. Don't forget, you can't pick the exact bottom, so you wade in, add systematically, and as we put in a bottom over the next few months, you will look magnificent over the next few years. Good luck.
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