Germany and France have emerged from the global depression faster and in better shape than Great Britain and the United States, according to the WSJ August 14Th. The biggest reason is consumers are spending in those countries something the Brits and Americans seem loath to do. Fear still grips us as home foreclosures keep rolling right along even as the Federal Reserve stated this week that the recession is near the end. July was another record month for people losing their homes with the Sun Belt leading the way and rust belt states Illinois and Michigan also in the mix. Unemployment continues its slowdown, and we're in double digit territory not counting folks who have given up looking for work. There are a lot of unemployed who've simply said, 'enough is enough' and retired or resigned themselves to odd jobs or off the books part time employment. Even illegal immigrants have tossed in the towel and stayed home.
If you're an investor who's bailed and put your retirement and investment money into Treasuries you're probably as nervous as a pickpocket at a police convention. You know what you want and have to do is to get back in to the market only you don't like your chances of getting caught if the stock market decides to suddenly reverse direction. You don't care what the Fed, your broker, the New York Times or your crazy aunt's tea leaves say, you don't want to chance losing your hard earned savings by moving into the stock market too soon. There is still a chance of a substantial sell-off such as what we experienced Friday as the markets dropped during the trading day triple digits and closed almost 80 points down on fear of deflation.
To be fair there are a lot of smart people on your side of the fence. The other's are on the other side waving you over and telling you things are fine and now is the time to be making some money.
Who do you listen to?
The best thing I can think of is to start dollar cost averaging into the market. Take your money and divide it into 1/12Th's and simple start buying what you once owned. Over the next 12 months you'll catch different prices both high and low but it'll be a comfortable way to get back in without the shock of diving in all at once and then maybe seeing the markets move back to their lows and laughing at you.
Finally, get more aggressive with your money. If you were invested in balanced or Target funds look for growth, growth-income or world funds to get more bang for your money. Those funds were hit hard and off some 40% and not because they were poorly managed, they just didn't expect the huge sell off that drove all prices down.
Getting back into the market is tougher than getting out. Any excuse is good enough for you to sell; you need some compelling reasons to venture back into the unknown.
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