This is a difficult time for investing in the stock market, as the main indexes have been on the trend in recent weeks. Both S&P 500 (snpindex: ^gspc) and Nasdaq Composite Materials (NasdaqIndex: ^i tocie) Earlier this month, immersed in the corrections sector, and while they appear to be rebounding now, there is no shortage of recession issues.
According to a survey by the American Association of Individual Investors, investor sentiment plummeted, with about 60% of U.S. investors admitting they feel “bearish” in the next six months. That's about 28% of the beginning of November.
Although the future may be uncertain, it may be helpful to listen to the advice of experienced investors who have experienced experience. Warren Buffett has experienced many recessions in his 94 years, and that’s what he said about the volatility of the markets he survived.
If the stock price continues to fall, it can be incredible in the short term. There is always the possibility of an economy falling into a recession and your portfolio may lose a lot of value. However, there is a big silver lining: stocks are also on sale.
In 2008 articles The New York TimesWarren Buffett is frustrated and scared for millions of investors amid a massive recession:
A simple rule determines my purchase. Be afraid when others are greedy, and be greedy when others are terrified. And most certainly, fear is now commonplace, even experienced investors.
However, he continued, this could work for favors from many investors:
[I]In the early 1980s, the purchase of stocks was a time when inflation raged and the economy was in tanks. In short, bad news is investors' best friend. It allows you to buy a portion of the future of the United States at a noticeable price.
With fear happening again, now, in Buffett's words, it's time for “greed”. As the stock price increases, the bigger these discounts will be. Loading these stocks at a lower price will not only save you money in the short term, but it will also bring you huge gains when the market finally recovers.
Historically, those who invest in the toughest times are often those who get the most rewards.
For example, suppose you invested in the S&P 500 Index Fund in January 2008. The market is about a month in the recession, and more than a year later, prices have begun to rebound. In the short term, your portfolio will sink, but if you only keep investing for 10 years, your capital will almost double by 2018.
