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When is the Right Time to Buy Stocks?

As we come to the end of a week that may have included home quarantine, home-school for your children and another week of stock market volatility, we thought some good news would be warmly welcomed.  The market levels we discussed in our past email have held true (so far) and we continue to watch them closely. It has been 25 days (consecutive) that the S&P 500 hasn’t been up back-to-back days, 28 is the most ever and this has only happened 10 times since WWII.

Is China a leading indicator for the rest of the world as COVID-19 runs its course?  Here is just a sample of the headlines from a few American companies with a presence in China. 

*APPLE says that ALL 42 stores in China have re-opened for business
*FEDEX says China demand has rebounded more than expected
*FEDEX says 90-95% of large Chinese manufactures are back operating
*FEDEX says 65-70% of small businesses in China are operating again
*STARBUCKS says that 90% of locations have re-opened for business

The media headlines have been very negative, so here is some GOOD NEWS (courtesy of Dave Ramsey).

 

When is the Right Time to Buy Stocks?

(Chart Source: Michael Batnick, CFA, Author of the Irrelevant Investor Blog and Director of Research at Ritholtz WM)

The charts below are from previous bear markets, showing the decline and recovery with the market bottom circled in RED.   

The last chart (bottom right, above) is a long-term look at the Dow. It shows that “bear markets” do come to an end, and corporations, the markets and investors have been able to preserver and prosper over time.


This may not be “THE” time to Buy, but it may be “A” time to Buy… 

In the short-term, we don’t know if the markets go higher or lower but studying the charts above, what is clear is that it doesn’t matter when you buy, only that you buy.  At this time, emotions matter more than spreadsheets, but with many clients having cash in their accounts, let’s discuss a buy list and an unemotional and systematic strategy to get the cash invested so you will be rewarded in the future.  

 It is inevitable that we will see sharp increases in COVID-19 positives in the United States as testing is substantially increased. And we want testing to increase.  With past pandemics, mortality rates are higher at the onset and begin taper off and settle at much lower levels by the time the virus is contained.

Our country has experienced World Wars, inflation, deflation, stagflation, financial panics and everything in between. We have come out of all these events stronger than ever, and we will do so again. It’s going to hurt like hell, but we’ll pull through this. Everybody who has invested during our darkest days has ultimately been rewarded.

Enjoy time with your family, spend some time outside, read a book or catch-up on that TV series you haven’t been able to watch. Have a great weekend!