With the recent market turmoil, you may be wondering what to do with your portfolio.  Should you sell your  stocks and funds, or should you be buying more?

Well, if you listen to the world’s greatest investor, Warren Buffett,  you would be buying.  The market is essentially on sale.  With stocks and funds plummeting, now is the time to buy.  Wouldn’t you rather run to your grocery store during a sale?

If you already have money in the market, now is probably not the best time to sell.  The secret to success in the stock market is buy low and sell high.  Selling now would be selling low.  But don’t fret.  The world  economy will grow.  It always does.  And so will your investments.

After the stock market crash of 1987, the market experienced a remarkable rebound.  As you can see from the chart below, by 1990, the Dow Jones Industrials was setting new highs.

So how do you get into the market the sane way?

Well, first let’s cover a very important point: You will never be able to time the market.  The chances of you buying at the lowest point and selling at the highest point are very, very low.  But you can buy “near” the low and sell “near” the high.

If you believe the market is near its low point then you should start dollar cost averaging your way into the market.  Take the amount of money you want to invest and divide it by six.  Then invest that about every months for six months.  For example, if you have $6000 to put into the market. Put $1000 in every month for six months.  If the market goes down, you’ll buy more shares for your $1000.  If it goes up, you’ll make more on your previous investments.

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