I have been saying this to investors for years. I started investing on my own back in 1999, I had just completed the Canadian Securities Course for my own use. Times were good the market was up and dot.com was all the rage. Bank stocks and other ‘blue chip’ stocks were way down. Value investing had gone out of style. Everyone was saying that things are different this time (sound familiar?) and calling Warren Buffet (look him up) yesterday’s man. Thank goodness for that course and for Warren Buffet’s advice to invest in value!
Rather than getting caught up in the dot.com bubble, I bought investments that had value and even had a product or service they provided. These investments were really cheap and most other people felt they were not worth buying, but I did.
Since then I have seen a number of corrections for various reasons. In my investing career, I have seen the technology melt down, 9/11, 2008 crash, a small correction in 2011 and now energy and growth problems. That works out to be 5 corrections in 25 or so years. Every time people were saying it is different this time, things will not come back. And every time, I bought more investments.
Did I hit the lowest day, no it is unpredictable; did I buy low, you bet and my investment portfolio has done very well. In fact I went from 0 to a million$ in 22 years, so I know it can be done.
What can you learn from this? Don’t panic and listen to the doomsayers, we haven’t seen doom yet and if we do, having a stockpile of seeds will be far more important than money. Buy low, when your gut feeling is telling you to ‘run for the hills’, that is most likely the very best time to buy. Having an advisor can help with this, because she/he can help moderate your emotions so you will make wiser choices.
So, my recommendation: buy, buy, buy, but make sure it is right for you by discussing with a good advisor. One who understands the value of value!
If you have any questions please send me and email: firstname.lastname@example.org.