Monday, October 13, 2008

Jakarta Index: Rock bottom?

In one way, the plunge of world stock indexes is every investor's worst nightmare. A taste of the Great Depression, as Nobel Prize-winning economist Paul Krugman of the New York Times just stated. (If you don't believe me, just open your third-quarter 401(k) statement.)

But here's something else about the Great Depression: It's when a lot of people made their fortunes. If you bought in 1932 when everyone else was selling, with blue-chip companies available for pennies on the dollar, your heirs today would be very rich indeed.

Keep that nugget in mind as the Jakarta Index and the Dow struggle with their lows. Years from now we may look back on these days as a historic buying opportunity. Victory goes to the brave, and there's no one braver than those wading back into stocks during tumultuous times.

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