Marc's comments (member since Mar 30, 2008)

Marc's comments from the Investor Central group.

The basis for prices for stocks are on the valuations of the companies themselves and their profits.

If the fundamental basics of the comapany are unchanged but the price has reduced because of external factors (for instance the global recession which is currently underway) then a stock can indeed be said to be 'cheap' imho.

The best way to invest imho isn't to try and predict market sentiment but to base investments on the actual fundamentals of companies - the market is fickle in the short-term but generally aligns with reality in the long term (hence the crashes on internet stocks eventually etc.).

Hi,

I've decided to dip my toes into the stock market despite the relatively bumpy conditions currently.

Reasoning being simply that many quality stocks have had huge drops priced into them and they 'must' recover from this hammering at some point.

With this in mind I've been investing in what I see as safe but dented staples:

JC Penney, Google, London Stock Exchange

All are down 40%+ in the last 6 months to a year ...

What are other people considering with stocks or is the sensible money staying on the side lines?

I own several properties in England and have always liked this side of investing - main things to take into consideration:

* Ensure that you don't need to cash in on the asset quickly, real-estate is a non-liquid asset it takes time to sell.
* Ensure that you have enough capital stashed away to cover costs (mortgage in most cases) on the property if it is vacant for a reasonable length of time (personally I keep this at 9 months cover).
* Don't try and go 'against' the flow of a market - if you're in the UK or USA at the moment don't consider purchasing until you are sure the market has bottomed out or you could find yourself having to hold onto the investment for a considerable length of time just to recover the initial investment amount (if you must purchase now then try and factor in at least a potential 20% drop to any price you offer).