Stock Market: Time To Go All In

I don't advocate trying to time the market. It's impossible to predict with any kind of consistent accuracy what the stock market will do, and the impossibility increases - regardless that the concept defies logic - as the time frame is shorter. I'm still looking at a horizon far enough in the distance that the day-to-day, week-to-week, or even month-to-month volatility doesn't bother me that much.

My life is reaching the point where I would prefer my investments start generating income rather than just building wealth. Were those the only two choices, I'd be fine, but there is always the possibility of losing money. Call me crazy, but that's what I'm trying to avoid.

With the election somewhat behind the country, I wasn't surprised with the immediate reaction in the stock market. It's hard to say exactly why the S&P index moves one way or another in the course of a day, an hour, or a minute, but the financial news media sure does try hard to align an effect with an apparent cause. And the stock market dropped the day after President Obama was re-elected. Despite the fact smart money had been on Obama, with Intrade, Nate Silver, and most of the polls all pointing towards a Democratic victory. I half assumed Obama's victory had already been “priced in” to the market.

Panic in the financial markets, at least for a day or so, kicked in. And that triggered my investing muscle. If everyone's panicking, it must be a good time to buy into the market and walk out with some bargains. After all, historically, the markets and the economy fare better under a president who is a Democrat than they do under a president who is a Republican. (FOX Business cites a McGraw-Hill study that shows the S&P 500 averages a return of 12.1% per year while Democrats are in office compared with 5.1% per year for Republicans, and the GDP increases 4.2% per year for Democrats and 2.6% under Republicans.)

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