Posts Tagged ‘Investing’

“These are the days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again.”

John D. Rockefeller, shortly after the Wall Street Crash of 1929.

The answer for how to respond to a situation like we are in now is preached in every credible investment book on the market – when there is blood on the streets, buy real estate – yet otherwise rational and intelligent people  are being caught up in the desperation and perception of hopelessness in the markets. Real Estate and Stock prices are plummeting, with the ’smart’ money staying out of the way.

But they are missing a fantastic opportunity. The stock of virtually every company in the United States is trading at a significant discount to what it was just six months ago. What has changed so drastically about America in that time? The answer…not much, if you focus on the long run.

The crazies are running around talking of the national debt, the US Dollar and the rise of China and India, but they fail to understand history and the way markets predictably boom and bust. The Stock market and Real Estate market will boom again. The people who buy near the bottom are the people who will get rich when markets inevitably correct themselves.

Personally I think we have already reached the bottom, and the gains of the last two weeks will mark the beginning of a long, slow climb back to record highs. I’m personally putting a big bet on the US economy and am building positions in several blue chip companies.