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What to do when a market busts

Posted by billspaced | 10:40 AM | , | 0 comments »

Ben Stein has written an article on Yahoo!Finance about what to do in a bust:

Buy more.

Yes, simplistic, but oh-so-true. It's hard to get the gumption to buy when prices are falling, but if you can afford it (read: how can you not afford it?), buy when prices are falling.

This is the reasoning: If at $100 you thought the stock, for example, was fairly valued (you bought it, right?), then at $50 it's a bargain. So, buy more.

The housing industry is the same. Ben offers this sage commentary about people and their penchant for counting on the recent real estate phenomenon of ever-increasing prices:'s a reminder that you shouldn't count on your home to make you rich. Homes are for living in. They shouldn't be your main investment unless you're a builder.

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