When prices go down

Article Excerpt

When stock prices go down as much as they have lately, it generally means the stock market offers some highly attractive buying opportunities. But many investors now wonder if we are headed for a period of years of weak stock markets. In fact, we’ve already gone through more than a decade of unsettled stock markets. Stock prices have dropped more than 50% and are now down to where they were in 1997. It often turns out that the best time to buy is when stock prices have plunged and a recession is clearly underway, as it is today. But some investors feel this time is different. They think things can only get worse, and that we face a replay of the 1930s depression. If this recession is going to equal the 1930s depression, it has a long way to go. So far, it has yet to equal the depths of the savings-and-loan crisis and recession of the early 1980s in some important respects,…

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