Now May Be a Good Time to Invest

Many people are panicking right now, selling their stocks and even liquidating their retirement accounts. I, on the otherhand, am sitting tight. And even increasing my investments. Why? Because right now is a great time to invest. In a recent Opinion piece in The New York Times, Warren Buffett, perhaps that greatest investing mind of our time, offered this advice: "Be fearful when others are greedy, and be greedy when others are fearful."

This rule is an extension of the old adage, "Buy low, sell high." This basic tenet of investing has been forgotten by quite a few people. However, it is comforting to know that, over time, the stock market gains. It comes out ahead. So rather than being amongst the fearful, now is the time to be amongst the greedy. Choose some stocks carefully, and check into your retirement account to ensure that you have solid investments. Rather than liquidating, replace what appears to be failing.

Carefully choosing investments in uncertain times

The fact of the matter is that you can get some quality stocks and other investments on the cheap right now. Financials and energy companies have had especially good valuation lately. While some companies will fail, by carefully looking at the fundamentals of a company -- debt, management, staying power -- you can identify companies that are more likely to succeed. You can buy these stocks at a discount, getting more for your money. When the stock market recovers, you will own that many more shares (especially if you are dollar cost averaging in your retirement account), and you will make a bigger profit.

This strategy is the "secret" to Warren Buffett's success. He chooses solid companies and invests for the long haul, buying in when the prices are lower and selling during the high flying times of the stock market. Buffett isn't a day trader. And he never went in for the derivatives that have brought the whole thing down. It's not a very exciting and sexy investment strategy, but it is one that yields the most consistent results over time. The stock market is cyclical. The key to "winning" in the long-term is buying in a down cycle and selling in an up cycle.

There are a lot of fearful people out there. It's time for some of us to get greedy.

Disclaimer: I am not an investment professional. This should not be construed as investment advice. All investment carries the risk of loss. Before investing, do your own research and/or consult with an investment professional.