News just broke that JPMorgan is picking up Bear Stearns for $2 a share, a huge discount from the $50 a share just last Thursday. You don’t have to be a rocket scientist to see that those numbers are HUGE. Is Bear Stearns the only firm that made the poor choices in regards to the subprime loans? Don’t be surprise if any of the other big Wallstreet Firms come out and announce that they are in worst trouble than previously announced.

So the million dollar question for you average investors, is it time to get out of the market until everything settles down? The market has been down 15% since the all time high reached in October of 2007. Lots of investors have been betting the downward trend will continue.

I don’t think now is the time to be dumping in money into the market all at once thinking we have a bottom. However, if there are good companies out there trading at a huge discount for no reason, it may be wise to start putting in incremental amounts of money into the stock to lower your cost basis. A popular strategy is to buy more when a stock drops 10%. Just be careful you are not trying to catch a falling knife.

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