Fear and greed are the two emotions that drive price action in the financial markets. In general the best time to buy is when the market is filled with fear. The opposite is equally true, the best time to sell is when the market is filled with greed.
Markets moved by fear are characterized by lower prices for higher quality businesses. Markets are filled with uncertainity. Usually market pundits are quick to discuss what they are not going to buy.
Markets filled with greed are characterized by higher prices for lower quality businesses. Everyone is filled with certainty. Even people who have never invested in the stock market before are convinced that only an idiot does not have every asset they own invested in one or two stocks that are offered at prices higher than anyone every imagined. Market pundits are quick to discuss how they have spread their risk amongst some of the highest priced stocks. Everyone owns stocks that were high priced when they bought them and their investments climb to nonsensical levels.
So what kind of market do you think we have now? I think we have a market filled with fear and now is the time to be invested. Now you can acquire high quality companies at bargain prices. If you have been following DavesFavs.com’s model portfolios you have a healthy 12.44% gain so far this year. Now is when you can’t go wrong by being long the correct investments.