Time to Buy? Almost

Posted by: Michael Mandel on July 16

Back on Dec 12, 2007, I announced here that I had shifted some money from equities to money market funds.

As it turned out, that was a reasonably good call, with the S&P down 16% since then.

Now I’m almost ready to shift back again. If anyone cares.

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Reader Comments

Lord

July 16, 2008 06:47 PM

I think so. Perhaps later this quarter or next.

vijay

July 16, 2008 11:42 PM

You could probably wait for a few more months (5-6) and let all the bad news come out. (more banks failing, higher inflation)

Joe Cushing

July 17, 2008 09:24 AM

I was planning on buying a car this summer and investing in my IRA in December. As of last week, I'm planning on keeping my car and investing this summer. Then possibly again in January. You can't say where the bottom is but you have to agree that Dow 10,xxx is a good place to get in. Other indexes as well. We were at Dow 10,000 in the 90s. This just goes to show, how out of whack things were in the 90s.

I'm keeping my money in America too. I see a flood of our Dollars coming back to buy assets over the next few years.

Rycoka

July 17, 2008 05:37 PM

Judging by the S&P 500 index on the CBOT Charts web site http://tfc-charts.w2d.com/chart/SW/X/?saveprefs=t&xshowdata=t&xCharttype=b&xhide_specs=f&xhide_analysis=f&xhide_survey=t&xhide_news=f Mr Mandel has just qualified as as prescient. Is it what we call in Australia a "dead cat bounce" though? (Even a dead cat will bounce a bit when it hits the ground from a height - apologies to animal lovers)

Jim D

July 17, 2008 07:42 PM

Remember when the NASDAQ looked cheap?

How'd that work out?

My brother is thinking of buying a house, because they're cheap now. They're not, of course, they're just cheap*er*.

Learning to recognize the difference is the only way to make money with investing.

S&P is only cheap if you think that profitability won't continue to erode. There's no reason to think it won't, is there?

Wait 'till the housing crash finishes going down, at least. It's a long way from there - maybe another couple years, but at least 6 months.

Bob

July 17, 2008 07:59 PM

Michael,

I'm wondering about your timing in getting back into the market soon. You have recently expressed your views that the retrenchment in consumer spending is underway, that retail numbers are overstated to the upside, and that the labor markets are deteriorating faster than the statistics show. Given these issues, and the fact that the stock market has not fully digested them nor accounted for their effects on economic growth, how have your reached the sense that it's "almost" time to get back in?? Right now the markets are still fretting about the banks and financial institutions. It would seem that when it start to fret about the economy in general and pessimism is in full swing that the markets will be near a bottom. Your further insights would be appreciated. Thanks!

Kartik

July 18, 2008 03:45 PM

S&P500 briefly tested 1200 this week. But only for an hour or two.

It will probably test 1200 again between now and October. I think that will be one of the best times to buy in the next 5 years.

Things to buy at that time are : Financials (XLF)
Small-Cap Value (IWN or IJS)
Mid-Cap Value (IJJ)
International Value (EFV).

Mike M

July 19, 2008 08:31 PM


Many things I read talk about a further decline in commodities, especially after the Olympics end and an optimism with the elections. So those along with the current support of Fannie & Freddie could indeed lead to a an upswing. However, after the realities set in shortly afterward on how much money it will take to revive the economy, some say we will take a large, final downturn in the marked. So I wish I knew if we are going to have DEflation from the hit to the real economy, or INflation due to the massive spending to revive the economy, bail out Freddies, etc. Maybe just the gold and infrastructure funds will do well. Any thoughts on that?

Thank you for your interest. This blog is no longer active.

 

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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