Do you think this is a good time to invest in stocks? Is the market going up or down from here?

Question

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Answer 1

The point here is that one should not attempt to time the market as studies have shown that investing at the commencement of a new year versus mid-term had little affect on return over time. No one knows with certainity whether the market will go up or down from here! However, what is important is that over time stocks provided a 17.9%, 20.1%, 28.6% and 52.6% return for a 20, 10, 5 and 1 year holding periods, respectively. These returns represent the Standard & Poor's 500 stocks for the time period 1946-2004. Source: "Stocks, Bonds, Bills and Inflation- 2005 Yearbook," Ibbotson Associates, Chicago.

From the very nature of your question, it sounds as if your're new to investing. Investing into the market should not be taken lightly as it is not a passive-event! One should learn how to evaluate stocks before investing your hard-earned money. It requires discipline, continuously educating oneself, reading financical statements and keeping your portfolio diversified. Diversification is key and paramount across industries, sectors and across asset classes.

So first educate yourself. Consider subscribing to an investment magazine and an joining an organization such as American Association of Individual Investors, a nonprofit organization, www.aaii.com. I'm a member and continuously learn from professionals who do not recommend stocks, bonds, mutual funds and etal. Moreover the organization does not accept advertisements. It is an investment Consumer Guide. Purchase investment educational materials and take the plunge.

After you've educated yourself consider DRIPs, companies that offer for an initial minimual investment a purchase of shares of stock of their company. Then enroll into their automatic dividend program that permits one's dividends to automatically reinvest for additional shares of that companies' stock at little to no broker's fee. This is an extremely superb means to compound your return.

For example, a year after graduating from college my wife and I invested $750.00 for about 36 shares into a company called Valleylab. It split three times before being purchased by Pfizer several years later. Today, we own over 2,000 shares of Pfizer due to that initial $750.00 investment after Pfizer's splits and reinvested dividends over a time frame of about 30 years. Pfizer as most other pharms are lacking new products thus holding down price appreciation. What I've demostrated is the power of reinvesting dividends over time. Taxes on dividends are your only consequence yearly. Our return would have been superior had we sold back in 1997 and 1998 when Pfizer was over $100.00. Another lesson for you to learn is to stick to your plan on selling stock when it has exceeded your anticipated return.



Anway, good luck and hopes tihs helps!

Answer 2

There will always be an opportunity to make money in stocks, whether the market goes up or down. Yes, this is a good time to invest in stocks. Why? Because the investment tone is fairly "bullish" right now. As someone pointed out, it's easier to make money in an optimistic environment.

Regardless of the direction of the market, there will always be a few companies making money for their investors. One of my favorite stocks is Elan Corp. plc, a Dublin-based biotech company that moved upward by 31% right in the middle of the bear market that began in 2000, while the most stocks lost close to 40% of their value.

Market direction becomes more important if you are investing in index funds and large equity funds. But if you were to find two or three good companies, like Continental Airlines (NYSE: CAL) you are putting your money where demand is high and management is hard to beat. There are a few other companies that are in the same class.

Whither goest the market? I don't think stocks will move at the same rate that they did in 2006. If oil prices move higher, investors will have a difficult time finding value. In other words, we are expecting a flat market for the next 12 months. But, not to dispair. You might want to look at food and entertainment stocks in the near term. Which food stocks? Think burgers and ketchup.

Hawk

Answer 3

There was a story of a famous investor of many years ago (by the name of Graham) who was asked about a certain stock, if it will go up. "Well," he said, "It is a bull market." The other man came back, crowing about how his stock rose. Graham said, "Well, it is a bull market." When stocks are going up in general, it sometimes seems hard to pick a loser.

Still, losers are out there, so the issue, which Graham was good at, is figuring out the stuff that would be going up even if everybody and their dog wasn't all keen on stocks. Is it a good time? A good time for what?

First, does the company make a profit? If no, then is it likely to make a profit now (new management, new product, new methods, etc.)? If not, then it is not a good time to invest--in that stock. If it is making a profit and likely to continue making profits, then even if it were a bad time to invest, it is a good time to invest in that.

The primary question is the market good for what you are interested in investing in. Part of the issue too, is are you wanting to invest, or trade (speculate)? The difference between the two is the same difference as planting a tree compared to catching a pig. There is possible money to be made either way, but one is an entirely different game than the other.

I think the general market will go up for the US, until political problems abroad unravel, then it will sink like a stone. Until then, it is a good time to invest in some, if not most, stocks.

We have better economic growth than most of europe and the rest of the world. We have lower unemployment than europe and many parts of the world. We have lower corruption than many parts of the world. We have a largely educated and capable workforce. We have scads of companies making productive and ecological improvements and innovation. Things aren't perfect, but pretty good.

Answer 4

the stocks are always going up and down it all depend on what you put into and when you pull out