Stocks on Sale!
Newsflash: The Fed cut short-term interest rates by the largest amount in 17 years and the Dow fell 400 points out of the starting gate this morning.
That’s the opposite of what usually happens. Regardless, it will lead to hand-wringing on Wall Street and higher ratings for CNBC.
But I’m cheering.
As far as I’m concerned, this is a blue-light special on stocks. I’m not advocating trying to time the market, but if you were going to invest some extra cash anyway, this seems like a fine time to do it.
For example, on Oct. 9, a share of Vanguard’s S&P 500 index fund would cost you $144. Right now, it costs $122, or a 15 percent discount. If you invest now and the fund returns to $144 a year from now, you make 18 percent. That’s a healthy one-year gain by any measure.
Of course, stock prices could continue to slide lower, but now is a fine time to claim your discount.
