Tags: Market | Fear | Buy | stocks

Face Market Fear Head On and Buy During the Bloodbath

By    |   Friday, 04 Nov 2011 08:08 AM

Four weeks ago I told everyone that buying stocks was a good idea, especially if you decide to pick stocks that are part of my Dividend Machine newsletter.

Here are my exact words:

In fact this is the best time to invest in the “right" stocks.
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Want some proof?

The greatest investor ever, the $200 billion man Warren Buffett, recently said that on Aug. 8 he bought the most stocks in one day than he had all year. That was the day the S&P 500 was at its lowest.

Sir John Templeton also said the best time to invest is at "maximum pessimism."

For me, it’s relatively simple.

The last time the S&P dropped over 10 percent in a quarter was first quarter of 2009 when many felt the world was going to end.

In fact, the next two quarters were up over 15 percent and the two after that were up over 4 percent each.

So the investor who invested the day after the last more than 10 percent drop saw the S&P increase 46.55 percent in the next 12 months.

No one knows what will happen in the future but it all depends what set of "facts" you are considering.

Of course in the first month of the quarter, October 2011 was the best month, the S&P was up over 13% and many of my selections saw more than 25% gains from low to high

Many tell me about the risk in buying stocks. I tell them a simple story that I will repeat to you

You can buy a 10 year U.S treasury bond that pays 2 percent annually from a country that is $15 trillion in debt and has over a trillion dollars per year deficits.

But somehow a company that pays a 3-5 % dividend but makes over 10 billion annually and has more cash than long term debt is somehow risky?

But the fact is many people spend more time planning their family vacation than their reitrement.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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BillSpetrino
Four weeks ago I told everyone that buying stocks was a good idea, especially if you decide to pick stocks that are part of my Dividend Machine newsletter. Here are my exact words: In fact this is the best time to invest in the right ...
Market,Fear,Buy,stocks
401
2011-08-04
Friday, 04 Nov 2011 08:08 AM
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