Packing Up On Stocks When The Economy Is Down?
October 2, 2010 3:10pm CST
Ok, I know it sounds crazy, but I was talking with a bunch of stock traders and apparently there has been people who have made money, from buying stocks when times are tough. I wish I was one of them. Anyways I was wondering has anyone tried it? Like did you buy any stocks of gold when they fell to the bottom? Was it worth it?
6 Oct 10
all else being equal of course it is better to buy lower but often things are not equal and often when shares are lowest valuations are highest e.g. lloyds tsb at 600p was 8x earnings, at 70p it was on 20x earnings. It would certainly be worth buying gold at the bottom but where is it? I invest for growth so I try to buy growing businesses in growing sectors when the market is falling.
2 Oct 10
That's the entire thing: buy low, sell high. When the economy crashes, it's a buyer's market. If you have the money, that's the time to buy real estate too, like at foreclosure sales. Then, when the economy recovers, you turn around and make like a 400% profit. Or more.
• Greenwood, Mississippi
2 Oct 10
That's always the way to do it...or to try to do it. The problem is no one really knows when stocks have reached their bottom. Sometimes you think they've fallen as far as they're likely to and then they proceed to keep going lower. Anyway, just think of shares like you would other things you buy. Would you rather buy a computer that is on sale or that is more expensive than usual? Of course you want it on sale! When the stock market is down, stocks are "on sale" too...that's the time for buying. I try to look for good companies whose share prices have fallen too low because the market is on a downward spiral. My main difficulty with investing is a lack of funds to invest! If you've just got a little to invest with, you're just going to get a little back. Of course, that's better than nothing!