If you are one of the few who actually have savings and cash on hand, this might be time to start seriously looking at getting into the market. Yes, the market is obviously going to have a lot of choppy days ahead, but this all out stock market panic makes one wonder whether this is a good time to buy into stocks. The question is, is there more risk of going down a lot further or more chance of it going up from here?

It is hard to bite the bullet and buy into this market now but this is where the big money is made. If you are going to profit from the stock market panic of 2008, you are going to have to get gutsy and invest soon. It might be too early to do it tomorrow or even this week as there may be another big down day ahead. But this market is oversold because people are bailing out and panicking leaving a lot of attractive stocks to invest in. To make the big score and make money from this September panic, you are going to have to buy soon at these lows. Now is the time to make money and start to buy into the market. You might want to look into Stock Market For Beginners / Dummies.

All the news today and this week will be about the failed bailout and how lawmakers are meeting and arguing over what to do. The stock market is tanking and people are losing not only their retirement but fortunes as well.  Even people who know nothing about the stock market are becoming interested and when there is money to be made, people start to pay attention.

If you are a stock market beginner and are lucky enough to have some cash you can risk losing, now might really be a good time to make a bet on a stock or two. Of course I say make a bet but I really mean invest. 

Every investor should know the phrase “buy low and sell high”. What that means is that it is best to buy stocks when they are at a low price and to sell them at a higher price. Buying low and selling high is how you make money in the stock market. Why is it then that there is such a temptation to do just the opposite: buy high and sell low?

Why is it so much easier to buy high and sell low? Stocks are different from other everyday things. When you go shopping for clothes or electronics or any other ordinary item and you see something that is on sale, you are more apt to buy it. A sale is a good thing for most merchandise. If a jacket was $100.00 yesterday and $80.00 today, it is still the same jacket but now you getting it for $20.00 less and are more apt to buy it. 

Many people who buy stocks seem to have a different mentality. When the stock market is on the rise and stocks keep going up, investors have the tendency to want to jump in so as to not miss the boat. When a stock was $50 last month and $60.00 now, many investors are actually more inclined to buy at the higher price for fear of missing out. Even though the stock is more expensive now than it was a month ago, some investors can’t wait to buy at that higher price!

Conversely, a stock that is going down is actually on sale from the price it was a month ago. It is like the jacket that you were more inclined to buy and yet most investors find it more difficult to buy that stock at the “on sale” price. They fear that because the stock is lower and continuing to go down, the value of the company must be lower. Sometimes that is correct and sometimes it is not. With the herd mentality though, many investors get swept up in doing what everyone else is doing; buying when the stock is high. Then when it goes down, they panic and sell when it is low. Stocks for beginners is a hard mental battle in down markets.

This year has been a very difficult year for investors so far. I am tired of looking at my stocks every day seemingly just to see how much I have lost. Then, everytime the market does go up, it seems to go right back down again very quickly. Is now the time we shoud be buying? In my experience, every time the stock market has dropped a significant amount, as it has in the last six or seven months, if I would have bought my stock picks at the reduced prices, I would have made money. Unfortunately I am like most other people and have found that buying stocks in a down market is a very difficult thing to do.

The first stock I am buying (I actually already bought it on 8/22/07) is Maxwell Technologies (MXWL) and I am down a little so far. I will ignore the $9.95 per trade fee (E*Trade) I am assessed as that amount is insignificant to the dollar amounts. I could prove that I am actually buying the stocks by making screen prints of my account and blackening account numbers out. That is, however, something I just don’t want to deal with and some people would not believe that as proof anyway.

8/22/07      750 shares     Bought     MXWL     $12.85      $9,637.50