Time to Buy

I think Friday was the time to buy. You can't time a market bottom but considering the performance on Wall Street last week, the bottom must be near. If you didn't buy on Friday, then make sure you buy tomorrow. MSFT and GE are at amazing prices right now -- you are looking at PE ratios close to 10. The G7 is responding with decisive action and I feel that credit markets are going to loosen back up.

Where to Buy? Financials!

Here's a little contrarian action for you -- buy a mutual fund or ETF that is heavy in financial services stocks. Why? Because at least we are half-way (if not already at the bottom) of the financial meltdown in the U.S. If you buy on a dollar cost basis, you will be able to capture not only the bottom but also lots of shares on the way back up. In 5 years those investments could return up to 100%! Do it now -- put $200 a month into a mutual fund for Financial Services and see a huge gain.

MSFT On a Dip

When it is time to buy Microsoft? When its on a dip! For me, I see a price for MSFT under $30 as a deal, so when MSFT dropped below (well below) $30 on poor earnings, I saw it as a great time to buy. But I'm no fool -- I will sell the second it gets above $30. A $5 gain on a $25 stock is 20% which is nothing to laugh at. MSFT has rebounded from $25, but you still have a chance to buy below $30. If you have more patience, you might be able to ride it back up to $35 (it's 52 week high in over $37).

Buy High and Sell Higher

Have you heard the old adage -- buy low and sell high? Well it sounds good in theory but in reality its never so easy. Another expression I prefer to use is "Buy High and Sell High". How's that? What is already "high" and will go higher? How is this possible? Easy -- buy an index fund! The Dow Jones Industrial Average is already high. I mean, as short ago as 6 years ago, the Dow was below 10,000. Now it's well over that -- definitely high! But if you buy now and buy often (dollar cost averaging), you will certainly be able to one day sell "higher". Now that's common sense.

When is the right time to buy ETF or index funds?

Heres a question from a comment recently "When is the right time to buy ETF or index funds?" The easy answer - " now and later!". My philosophy is to buy these shares on a regular basis to even out the short term fluctuations in share price. Buy your favorite ETFs and indexes on a monthly or quarterly basis and see your returns grow steadily over time!

MSFT (Part 2)

I wrote earlier about Microsoft, but now I feel there is a buying opportunity. Microsoft took a big hit over earnings last week and I feel its current price of 25.50 is a huge buying opportunity. I see this stock reaching $30 a share (again) in the near term, especially since this Yahoo silliness is over. Buy MSFT and see a 17% gain in a matte of months! Mark my word!

The Two Things You Need to Do to Invest in ETFs and Index Funds

Investing in ETFs and Index Funds are the best way for a casual investor to save for retirement and future success. There are only two things you need to do to set your plan in action:

1. Pick your sectors
2. Buy regularly

That's it! The second part is the most obvious so let's look at it first. Its all about dollar-cost-averaging. Buying on a regular basis, say $500 every three months, will help you average out the price paid for your holdings and smooth out any short term fluctuations.

The first part is all about deciding which industries or regions you feel will outperform the others over the long run and then decide which investing options are available. For example, I am betting on three sectors for the future -- Biotech, Financials, and Energy. Now, for each of these areas, I pick one or two ETFs or Index Funds which provide the exposure I'm looking for and that also have low fees. Once this is decided, you set your investment plan and forget it!

How to Invest in the Long Run

I've said it once and I'll say it again -- if you are NOT an active investor, you should only buy index funds and ETFs. When I say "active investor" I mean someone who will spend the time doing fundamental research on stocks like reading the annual reports, calculating a few simple ratios, and committing to investing on a dollar-cost-averaged basis. If you can't handle this part time job, then you are not an active investor. Buy ETFs and index funds on a regular basis and you will do better than 90% of your investing peers. I promise it!

Microsoft (MSFT)

Is it time to buy Microsoft? A recent earnings disappointment has pushed this bellwether down into a very attractive range, but I don't think it's time to buy. Why? Yahoo! poses too much risk. That risk being if Microsoft really buys the struggling search engine and portal. Yahoo, I feel, would be a horrible investment by Microsoft and it would dilute shareholder value. Earnings might increase but not enough to make up for the billions and billions in cash disappearing from MSFT's balance sheets. It would literally be another AOL - TimeWarner fiasco. This risk is too great for me to say invest in Microsoft. Sure Microsoft has backed off the Yahoo offer and removed it but I think it might just be a strategic move before they get Yahoo to take it. It may seem over, but its never over once you open the gate.

Visa (V)

Visa had its IPO a couple of weeks ago and opened big. Now the stock sits just above $60 a share. I got in at $58 a share. The size of the IPO was a lot larger than it was for MasterCard (MA), so I don't see the possibility for such a huge run-up, but there is definitely an upside to this one. Look for Visa to move big (either up or down) after it's first ever earning report in a few months.

Google (GOOG)

Is it too late to buy Google? Is the company's growth leveling out? Well their last earnings report missed expectations and sent the stock down. Now this week we had the accouncement that Microsoft wants to buy Yahoo, sending GOOG down further. Is this a buying opportunity? It could very well be. The stock is down an amazing 25% YTD! That's even more amazing when you consider "YTD" means the month or so! There has got to be a rebound here soon -- buy on Monday and see 5% easy!

Fortress Investment Group (FIG)

This "hedge-fund" company went public in Feb. 2007 at a price in the $30. Since then the stock has dropped all the way down to current levels in $12-$13 range. Is it a buy? Well that all depends on whether they can return to profitability. In the last quarter they lost millions, but in previous quarters the company had huge profits and profit growth. If you like a speculative play, read up on this stock -- it could be a big one.

Merrill Lynch (MER)

Another banking stock on the rocks is Merrill Lynch & Co, The stock has dropped from the high $90s a share to the low $50s a share on several large write-offs. So how is this bank staying afloat? Well even though those are large write-offs, the banks has hundreds of billions in assets. Another thing to consider the recent influx of foreign investment. Asian and Middle Eastern governments are pumping billions in to Merrill and Citigroup -- what do they know they you don't? These companies will stand the test of time and bounce back!

Citigroup (C)

Is it finally time to buy Citigroup? The stock has taken a severe beating in the last 4 months and now sits under $28 a share. If you are investing for the long term, I think this is a solid buying opportunity. Start picking up shares every month, spending at least $1000 each time to keep fees low (% wise), and ride out any short terms bumps. Within 5 years you will triple your money!

A Rocky Start

The U.S. Stock Market has seen a rough start to 2008 after half a week of investing. The Dow Jones Industrial Average is down big time! It opened on January 2, 2008 at 13251. A scant few days later, it closed the week on January 4, 2008 at 12800. That's a drop of 451 points in just three days, or a 3.4% loss right off the top! Could 2008 be the first of a series of bad years, or will the U.S. economy show itself to be invincible once again. Only time will tell.

Contrarian 101

What does it mean to be a Contrarian? Well it means going against the grain. Some say that a stock market bubble breaks exactly at the point where the last skeptic buys in to the Bull Market. A Contrarian goes against the grain and does the opposite than the prevailing market trends. I tried to go Contrarian in mid-2007 and got no where fast. I backed out of stocks and focused more on Bonds in hopes of a market downturn. Instead the market shot up to a record high and then was very volatile for the remainder of the year. I will remain Bearish this year and see what happens. Judging by today's market events, I might be on to something.

Disclosure Policy

This policy is valid from 31 December 2007.This blog is a personal blog written and edited by me. This blog accepts forms of cash advertising, sponsorship, paid insertions or other forms of compensation. The compensation received may influence the advertising content, topics or posts made in this blog. That content, advertising space or post may not always be identified as paid or sponsored content. The owner(s) of this blog is compensated to provide opinion on products, services, websites and various other topics. Even though the owner(s) of this blog receives compensation for our posts or advertisements, we always give our honest opinions, findings, beliefs, or experiences on those topics or products. The views and opinions expressed on this blog are purely the bloggers' own. Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer, provider or party in question.This blog does not contain any content which might present a conflict of interest.