The stock market – Is it time to get back in?

I’ve seen numerous stories recently on TV about this issue. Since the crash of 2000, I guess people are leery of the market so they stopped investing. I’m always curious as to what this means. Do people see the share price of stocks or mutual funds drop and then stop investing? Do they sell everything and put the money in a shoe box under their bed? Do they stop day-trading and start buying rental property? Well, if they’re stupid they do.

Is it time to get back in the stock market?

No, it isn’t. The time to “get back in” was 6 years ago. Actually, “never getting out” was the correct answer. If you sold all your mutual funds and put the money in your savings account back in 2000, you’re a dullard so don’t bother getting back in. Just spend all your money on plasma TVs and hot dogs so you'll have something to look at when you’re out on disability for your heart attack and/or impending diabetes. Just live off Uncle Sucker like you wanted to from the beginning.

Here’s the deal: I’m not a math major or an investment analyst, but I do have rudimentary math skills. If your philosophy is that you only buy shares when they are expensive and refuse to buy them when they’re cheap, you won't make any money. On another note, “investing” in your house is also dumb. Maintain it, even enhance it, but don’t think throwing all your money at it will make you rich. Remember, you can’t take a brick out of the wall and buy groceries with it. When you sell your house, you also have to buy another one, unless you plan on living in your car, and the fact that you made 35% profit on the sale doesn’t mean you’ll have a pocket full of money to live on. You’ll have to spend 35% more to buy your next house…unless you live in Fantasyland where only YOUR house increases in value.

The bottom line is that day-trading, house flipping, and trips to Las Vegas are high-risk maneuvers that usually don’t work. You may know people who have made money doing it, but the odds are against it. Remember, my financial advice is rock-solid: Buy a calculator and don’t be stupid.

And the “don’t be stupid” part works for just about any situation, unless you’re interviewing for a CEO position somewhere.