Real time To Enter in Market

                        Right time to enter into the market

In this period of recession it is not very easy for an investor to decide for the right time to enter into the market due to the sudden rise or fall of the market without any certainty. With the sinking global economy it would be incomprehensive thought to put your hard earned money into the uncertain market. So a smart investor should realize that golden opportunities would appear only with the proper research not from the rumors.

If you extrapolate long-term chart of the Dow Jones average, you would see its current level equal to what it was around 2002-2003. It has dropped drastically since the financial collapse (unplanned distribution of money in the form of loan by the bankers) of 2008-2009, but it is still in the familiar territory. It may however take another two or more years for a large upswing in the markets, but at least we can hope that it would not come below 7000 points. That might give a ray of hope to the investor to start investing in the market. There are some points you have to remember before embarking on your new investment like:

Dollar Cost Averaging

This concept of Dollar Cost Averaging actually comes into mind of an investor in the current market situation. It is the process of buying stocks when the prices are low on a regular basis with the fixed amount of money because when the prices are low, you are able to buy much more shares. When prices are high, you can buy fewer. In this way if you look for the long term investment then it would be better to gain the large amount of profit in the future. It may go against the human nature to buy stocks at the time when everything is falling and red but in fact it can bring you a better payoff in the future.

Don't Wait Too Long

It is always the human tendency to buy the stocks at the least rate. So at this time of recession everyone would like to wait for the market to go much deeper but it could be the worst decision for them. When an upswing begins in the market, it may happen so fast that you will miss a huge amount of profit out of it. There are billions of dollars of cash on the sidelines that are just waiting to involve into the market when the good time approaches. You can imagine what impact it would have on prices because of a upcoming surging demand but limited supply of stocks and mutual funds. So don’t wait too long!

Which Companies to Buy

There are a lot of low-priced stocks right now. Don't jump without extrapolating into any old stock just because it may be possible that the company being dangerously close to bankruptcy. One popular example is GM. The stock prices of this company have dropped incredibly. Is it could be a good deal for you? The government will probably not allow them to go into bankruptcy by aiding them with the stimulating package because the bankruptcy of that company could have a serious impact on the economy of the nation. Even if they survive they could not thrive and the prices of the stock might drop even more. Nobody can predict its future. This is just a particular example but you can see the number of companies falling in this category at this time of recession, so it could be a difficult task for an investor to choose the required company.

Will the Economy Get Worse?

This is probably the most important question going on in the mind of investors. The government is trying hard to stabilize the economy by stipulating a stimulating package, some experts believes that there could be more doom and gloom in the future and lost jobs on the way. So its really hard for an investor to decide what to do in this situation. Clearly nobody can stipulate about the upswing of the market but Hopefully in the 2009-2010 it could come out with a firm base to take away this period of recession.