Thursday, March 13, 2008

Run and hide investing

I've had a number of conversations lately with co-workers, friends, etc. about the stock market. Obviously it's been top of mind given the dismal performance we've seen in the last 4 months. It's amazing to me the lack of confidence among professionals that the economy will come back. They are all scaling back investments and going to cash. I understand the need to ensure an emergency fund but cutting back on long-term investments now is the wrong move.

While I have no real empirical data to offer here, I do remember 2003 being a very strong year after the doldrums of 2000-2002. I personally scored some nice bargains of companies that were beat up and very cheap to own.

My only idea / advice today is that keep pouring money into your 401k, IRAs, etc. as the dollar cost averaging will catch up and you'll have a much larger investment in the same great companies when the economy upturns.

No comments: