The bottom line...........

Today is Thursday, April 24th, 2008.

The global markets, the U.S., and now foreign countries (i.e. Europe, Asia, even emerging markets) are all experiencing a 'crisis' for lack of a better term. Credit crisis. Housing crisis. Retail crisis. Call it what you want, but at the end of the day the markets have been battered and the average informed investor is about as skeptical as it gets. Hence why most are sitting in cash and not invested fully, if at all, in the stock or bond market.

This should not be the case!

Reasons as to why you should invest, now:

1-the market is trading at about 10-15% below the highs late in '07 and if you have the money to invest, you can get some great value, especially in stocks. I don't care what sector you invest in right now, even though it will make a small difference, the fact of the matter is that stocks are trading at a large discount to what they should be and if you get in now there will be big gains in the next 2-5 years. Yes, there will be volatility and ups and downs. BUT, if you have a long term attitude, there is mucho dinero to be made.

2-the 'crisis' is nearing an end, not at an end or over currently, but getting there... I could quote studies all day long but the facts are easily interpreted: the avg. recession, which we are in, lasts 10 months and drops the market 12-18%. This drop marks the half way point and since we saw the bottom in February, which was about a 15% drop depending on which index you follow, this means that we should be coming out of the recession in a couple months. That is, if history stays true to itself.

3-the Federal Reserve Board aka 'the fed' has acted fast and aggressively to cut interest rates and open the discount window to financial institutions, this has eased liquidity and helped bank balance sheets, which in turn has made investors a little more comfortable with the financials, which make up 20% of the market cap in the U.S. (To put this in layman's terms: the fed opened its wallet and told banks that it could borrow as much money as it wanted at a lower interest rate)

4- many companies have made write-downs but should be ready to make some write-ups on loans that were previously thought to be default/bad. Likewise, many companies have had lower than expected earnings and have projected a lower guidance for the upcoming year and '09, this gives them some leeway for the next few years and lowers expectations. The result of this is basically they have lower goals and can reach them easier, thus making investors more impressed even when they meet these smaller goals.

There are more reasons but these are the main ones. In one of my next posts, I won't focus on the macro-market, instead, I will look at the micro-market aka individual sectors and industries and make some recommendations about what I think will perform well in the near future.

Alright kids, that's all for today. Mas informacion manana. Your homework for today is to read at least one article on the current market. Have fun!