This Economy Has Cost Everyone Money
3:30 AM
Anybody who has lost money this last year in the stock market may be unsettled. This has been a tough couple of years where almost everyone has come out a loser. The stock market is a place where anybody can look like a fool when it is going down and look like a hero when all stocks are going up.
Getting the confidence to put more money in the market after having it perform so poorly is something that does not come easily. After all, whos to say it wont just turn around and go back down again? Figuring out a good reentry point is something that seasoned investors would have a much better chance of figuring out than the beginner. However, we do know that at some point, it will be the correct time to start buying again.
Averaging down your better holdings is a good thing to do but it can be quite scary too. This is especially so in a market that is in an extended free fall. So, at this time we are really no closer to knowing whether right now is the right time to average down. It seemed a while ago that the stock market had taken a big fall and it might have been the right time to average down some of your better stocks. But then the market continued to fall even further so it would have not worked out if you had invested more.
Although it may be tempting to buy more of what you have and to average down, it might not be the smartest choice. Most economists and stock market analysts agree that you should be diversified in your investments and that might mean buying other company stocks instead of the ones you already own. It also could be done by buying other types of financial investments such as treasury bills or bank CDs. A good investor never has too much in one asset as that would expose them to too much risk.
Even if you have been properly diversified, you have most likely lost money in this terrible environment. All investments types have suffered as well as jobs and anything else related to the economy. This will not last forever though, and at some point it will be the right time to get back in. Those that are able to recognize the correct reentry point will stand the best chance of cashing in and actually making money.
Getting the confidence to put more money in the market after having it perform so poorly is something that does not come easily. After all, whos to say it wont just turn around and go back down again? Figuring out a good reentry point is something that seasoned investors would have a much better chance of figuring out than the beginner. However, we do know that at some point, it will be the correct time to start buying again.
Averaging down your better holdings is a good thing to do but it can be quite scary too. This is especially so in a market that is in an extended free fall. So, at this time we are really no closer to knowing whether right now is the right time to average down. It seemed a while ago that the stock market had taken a big fall and it might have been the right time to average down some of your better stocks. But then the market continued to fall even further so it would have not worked out if you had invested more.
Although it may be tempting to buy more of what you have and to average down, it might not be the smartest choice. Most economists and stock market analysts agree that you should be diversified in your investments and that might mean buying other company stocks instead of the ones you already own. It also could be done by buying other types of financial investments such as treasury bills or bank CDs. A good investor never has too much in one asset as that would expose them to too much risk.
Even if you have been properly diversified, you have most likely lost money in this terrible environment. All investments types have suffered as well as jobs and anything else related to the economy. This will not last forever though, and at some point it will be the right time to get back in. Those that are able to recognize the correct reentry point will stand the best chance of cashing in and actually making money.
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