Is Today a Good Time to Buy?

I’ve been pondering the wisdom of buying into the market now, while the going’s cheap. This BusinessWeek article confirmed my ambiguity:

Across many asset classes, prices appear cheap, and in some cases dysfunctional markets have created long-term bargains. Many money managers see good value in beaten-down blue chip stocks. High-quality corporate and municipal bonds are yielding unprecedented premiums over Treasuries as investors flock to safety. Even in real estate, or specialty areas such as master limited partnerships and closed-end funds, there are opportunities for savvy investors.

The article cites experts as buying:

Blue chips with strong franchises and little debt.

Companies that serve the growing middle classes of China and India as well as the wealthy countries of the Middle East.

High-quality bonds and municipals.

Looks good, but there are sound reasons that it might not yet be time to put anything into Mr. Market:

We may not have hit bottom yet. A BusinessWeek commenter named William put it this way:

Don’t think of the market in terms of recent declines. The market was so over inflated even the recent declines are nothing. Think of it in terms of ‘regressing to a certain year.’ …we really should look at anywhere between 1990 and 1999 prices. So if you are thinking of investing – stocks, RE, etc – then go look at its price in 1995. You should be paying the 1995 price or its lowest point from 1995 to today.

-The United States as we know it is finished (which doesn’t mean the market-based economy is dead, but the argument is a compelling emotional reason not to invest.)

Deciding whether or not to invest boils down to one of the fundamentals of investing itself–namely, maintaining an emotional distance from the money involved. I lost some money from my 401K, but I’m not upset about it so much as I’m curious as to which investments might pay off better in the future.

For that reason, I’m probably going to invest again soon (but not now–I think the market is going to fall further). I acknowledge that the investments might fall further, so I plan to use caution and careful research. When I remove fear and dread from the equation, I can’t think of a good reason not to invest.