Did You Miss the Best Week to Buy Stocks?

Ten years from now, we very well may look back and say that the first week of March 2009 was the best week to buy stocks in more than a generation.

That Monday, the U.S. government announced another bailout of AIG, and the Dow Jones Industrial Average fell 4% to 6,736 -- below 7,000 for the first time since 1997 and marking a full 50% drop from the October 2007 highs.

Breaking that psychological barrier of Dow 7,000 was apparently too much for many investors to bear.

Over $22 billion was pulled out of equity-based mutual funds over the following week, and if you flipped through some of the news stories, they were rife with capitulation from analysts. My favorite lines included:

"It's like an unending nightmare."

"Why should I step out in front of a train?"

"This is the time for hysteria."

Even the slightest contrarian investor had to perk up at such blatant bottom talk. If there was ever a time to buy when there was blood in the streets, that was the week to do it.

Pigs get slaughtered
Fast forward just three weeks and the Dow is up 17% off its March 6 lows of 6,443, and over 80% of S&P 500 members are up more than 10% over the same period. Among the biggest winners are:

Company

Price % Change (3/6/2009 to Present)

NYSE Euronext (NYSE: NYX  )

26%

Corning (NYSE: GLW  )

34%

Schwab (Nasdaq: SCHW  )

33%

Caterpillar (NYSE: CAT  )

31%

Adobe Systems (Nasdaq: ADBE  )

27%

CME Group (NYSE: CME  )

34%

Source: Capital IQ, a division of Standard and Poor's.

Since that first week in March, we've seen a number of positive signs from the market, including tech bellwether Oracle (Nasdaq: ORCL  ) beating analyst estimates and announcing its first dividend. There have also been numerous economic reports that seem to indicate an end to the free fall of prior months.

But let's not get too excited
Yes, this is only a four week period, and yes, we could certainly see more dips in the market in coming months. But this simple example is a stark reminder to remain rational and patient while those around us lose their heads.

With a little fortitude and a little cash, you can take advantage of tremendous long-term buying opportunities like we saw the first week in March. If you missed the chance to buy during the first week of March, don't panic. If this market's taught us anything, it's that we'll have another shot if we just remain calm. 

To get started, begin compiling a list of stocks you'd be happy to own for the next five years and beyond. Ideally, these will be companies …

  1. Built to last 100 years or more.
  2. Dominating growing industries.
  3. Helmed by committed and proven management teams.
  4. Governed by the highest corporate values.
  5. Consistently increasing shareholder value.

Our Motley Fool Stock Advisor service believes that Costco fits the bill perfectly, and the team recently named it as a "best buy" right now. If you'd like to learn about the other stocks we're recommending at Stock Advisor, a free 30-day trial to the service is yours. Just click here to get started.

Already a Stock Advisor subscriber? Log in at the top of this page.

Todd Wenning shorts herd behavior, but has no position in any stock mentioned. NYSE Euronext is a Motley Fool Rule Breakers recommendation. Charles Schwab and Costco are Stock Advisor recommendations. Costco is also an Inside Value pick. The Fool's disclosure policy can get you where you need to go.


Read/Post Comments (29) | Recommend This Article (146)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 30, 2009, at 1:41 PM, majordm wrote:

    why not the headline 'now is the best time to buy'

    oh...

  • Report this Comment On March 30, 2009, at 2:12 PM, OldEnglish wrote:

    Good news, you'll be able to recycle this article in another month or two.

  • Report this Comment On March 30, 2009, at 4:26 PM, groupware2 wrote:

    While the prices were sweet in early March, today was certainly a day for the bears. Ouch.

  • Report this Comment On March 30, 2009, at 4:43 PM, WasANichelender wrote:

    More ridiculousness here at the Motley Fool...this can be recycled every 20 days over the next 6 months, but keep up the good work and drive those enrollments into the newsletters!

  • Report this Comment On March 30, 2009, at 5:47 PM, jsstock wrote:

    Exactly. Posted March 30th but was not written fast enough. Dow down 400 points in last two days.

  • Report this Comment On March 30, 2009, at 5:56 PM, tonester2k wrote:

    This is the article you write when the Dow hits 14,000 again... Hell, I'd settle for 8500...

  • Report this Comment On March 30, 2009, at 5:57 PM, tonester2k wrote:

    And let me add, I thought we were buying and holding long term and not looking at short term fluctuations in the market... ;-)

  • Report this Comment On March 30, 2009, at 6:25 PM, JudgeMillsLane wrote:

    You know, this kind of article reminds me -- generally -- to keep my nerve. I'm glad to read it and remember that a -250 day won't be the end of the world.

  • Report this Comment On March 31, 2009, at 12:56 AM, owlafaye wrote:

    I was not in the market at all, just watching it. I had deposited all my free cash with an internet trader the previous month. At the close on 6 March, I read everything I could get my hands on at the Motley Fool website. Monday morning I bought 1000 shares of a dozen+ 5 star CAPS Fool stocks, generally under $3. MWA MTW IO RAME CDE LMC TXCO MMG ESLR to name a few. When they near doubled I sold, buying back when they fell substantially. (ESLR blew me away...and I DIDN'T chase it...laughter) I am 30% up. Thanks Motley Fool Caps.

    signed:

    A complete and utter Fool.

  • Report this Comment On March 31, 2009, at 1:31 AM, kalaheo41 wrote:

    was up 72% now 52% next/?

  • Report this Comment On March 31, 2009, at 1:32 AM, kalaheo41 wrote:

    Thanks Keep it UP.

  • Report this Comment On April 03, 2009, at 12:31 PM, belzerlfool wrote:

    I bought ford @$1.50 and cat at $11.31 . I am having a ball . Seriously considering pulling some of the equity out of my farm and buying more . How can you NOT make money in this market ? The bootom has hit and the bull is pawing the ground . Pray for me , I am in100%

  • Report this Comment On April 03, 2009, at 1:56 PM, salvadorveiga wrote:

    Geeez, perhaps you can print this again late this year ? Ahahah...

    Long term buy and hold investors won't even see it coming... keep preaching this is the time to buy bla bla...

    The Dow is going under 5,000 easily in this Bear...

    In a post I wrote in January when the S&P was at 940's I said we'd fall to a range of 600-650 points, and that the bottom would be between March 10th and March 15th.

    This bottom would be followed by a mid term bear market rally that can take us up to 1013 points at least. This rally is a major opportunity for conservative and buy and hold investors to get OUT of the market with the most minimal losses. The next leg down is going to be deeper than the one from 2007 to March 2009.

    You can check that everything I said in this post is true at www.jogarembolsa.blogspot.com

    namely the chart I posted along time ago - http://3.bp.blogspot.com/_l3Np4NrEMCU/SZWp0Fgf8oI/AAAAAAAAAF...

  • Report this Comment On April 03, 2009, at 1:56 PM, salvadorveiga wrote:

    Good luck...this is the eye of the hurricane

  • Report this Comment On April 03, 2009, at 2:01 PM, ambronze wrote:

    I can understand advising people to buy a house if they can afford it, with 20% down and ample resources, but the stock market is so laden with potential landmines-the malls are empty, the banks own mortgages on billions of dollars of retail property-I think there are better places to put your money. Including under your pillow.

  • Report this Comment On April 03, 2009, at 4:04 PM, Hman12 wrote:

    "Monday morning I bought 1000 shares of a dozen+ 5 star CAPS Fool stocks," The he promtly sold them. There are a lot of Monday morning quarterbacks - show me your statement and i might believe. Even so enjoy paying the cap gains and I am sure you will liklely offset them by 'timing' it wrong next month. the market runs on emotions and there is 'some' positive news out there BUT Liqidity and brung off this bad debt aside, in the end it will come down to jobs. Are the fundamentals being put in place to bring people back to work to consume and pay taxes or is the trend still in the other direction? Today, I think the answer is clear. I see a cyclical Dow between 6000 and 9000 for an extended period. During that period there will be a lot of winners and loosers, and if you have the stomach to buy at 6000 or below and the fortitude to sell after only 1000-2000 point gains you can make a killing. For me, there is suimply too much risk - I don't see the jobs so I don't see the long term opportunity. Yet.

  • Report this Comment On April 03, 2009, at 4:16 PM, timkop wrote:

    I agree with Hman12. Dow 6000 then 8000, who knows in the short term run (one year or less) the Dow will rise and fall like the sun. One must, sell on good news and buy on bad news.. Be careful, its a jungle out there trade only quality companies with good balance sheets

  • Report this Comment On April 03, 2009, at 6:10 PM, crawlfish wrote:

    Last summer when I notice that the stock market was in a decline I search my budget and increase my 457 plan deferral. This January I paid some things off and increase it again. This is the first time I had the money in a market decline to take advantage of it. You make money in the stock market by buying low and selling high. But you have to have nerve to do this which is counter to the herd instinct.

  • Report this Comment On April 03, 2009, at 6:45 PM, Saratovets wrote:

    I agree that this article may easily be recyclable, maybe several times in the coming months. However, I believe that what we have seen in the last week, will be typical of the recovery and eventual 15000 and beyond Dow. That is, the growth will come in spurts. If you were in you'll be happy, if you weren't you'll have missed one of the boats. I continue to invest every 2 weeks money that I don't really have a use for anyway. The dow may hit 1000, but it will also hit 14000 probably before I retire in another 30 years. If I keep waiting for the bottom, I may never find a comfortable time to get in.

  • Report this Comment On April 04, 2009, at 1:44 AM, max12345 wrote:

    No, I did not miss that week to buy stocks. What I did is (among other purchases I also made) is that I increased my earlier positions in what my broker calls "dogs"(and my investing in them "madness") (which I am just assuming must mean something close to real foolishness).... but that I instead believe (and each one for good reasons) are all coming back.

    GM at well under two dollars, Citi at just over a dollar, AIG at well under a dollar, Freddie Mac and Fannie Mae at 40 cents, General Growth Properties at about 50 cents (likely to go into a managed Chapter 11 but come out of it to live another day)...and I even broke my personal bank and spent a whole 7 dollars per share to buy some GE.

    In other words I loaded up on some of the biggest and best American companies and brands of yesteryear (and of tomorrow) at sub-sub-sub-bargain basement prices.

    I invested about 30K total in these stocks over time and I may well lose 5 to 10K total on some of them. But in five years most should be trading at 10 to 50 times what I paid for them. Now is that real "foolishness" or isn't it?

    And of course I would be (more than) satisfied if I "only" made about half a million dollars on this authentic foolishness. (i.e. 25K times 20) And is Citi -or GM for that matter- trading at 10 in five years so outrageous a thought?

    With of course my consolation prize being if I lose ... that I will have been a TRUE and AUTHENTIC and GENUINE FOOL!.....

    I will write back again in 5 years with more nonsense to allow tracking my "performance"....

    ...and in the meantime please do listen to Warren.

  • Report this Comment On April 04, 2009, at 10:47 AM, blkbrd101 wrote:

    Isn't it marvellous how the FOOL always shows what we should have bought AFTER THE FACT. Did they predict or forecast any of these companies to make such gains. I doubt it.

  • Report this Comment On April 04, 2009, at 12:26 PM, salvadorveiga wrote:

    Geeez, perhaps you can print this again late this year ? Ahahah...

    Long term buy and hold investors won't even see it coming... keep preaching this is the time to buy bla bla...

    The Dow is going under 5,000 easily in this Bear...

    In a post I wrote in January when the S&P was at 940's I said we'd fall to a range of 600-650 points, and that the bottom would be between March 10th and March 15th.

    This bottom would be followed by a mid term bear market rally that can take us up to 1013 points at least. This rally is a major opportunity for conservative and buy and hold investors to get OUT of the market with the most minimal losses. The next leg down is going to be deeper than the one from 2007 to March 2009.

    You can check that everything I said in this post is true at www.jogarembolsa.blogspot.com

    namely the chart I posted along time ago http://3.bp.blogspot.com/_l3Np4NrEMCU/SZWp0Fgf8oI/AAAAAAAAAF...

    DONT BE FOOLED ! DOW BACK TO 15,000 won't happen for decades, unless inflation ramps up to double digits like 20%, but even so that rise will be FAKE.

    For now, the upward movement is here to stay... it will last a few months... but by the end of the year, we'll have a bigger downside that 2008...I'll be here by that time to see who was right... me or buy and hold investors.... Good luck everyone

  • Report this Comment On April 04, 2009, at 2:55 PM, RVerbalKent wrote:

    I don't have a crystal ball on where the market will be in the next few months or more importantly the next few years. What I do know is that "Expert" advice is usually self-serving. IF all the lies and deception have been or are at least legitimately being weeded out of the system, then the market should be on a long term upward trend, but since I suspect there are still plenty of skeletons in the closet and that the medication the Gov't has prescribed MAY be worse than the disease there's still a big risk of major downside. For the fellow buying all those shares at big discounts, Citi, GE etc...you're timing was phenomenal, why not cash out with the gains and buy back on the dips? It wasn't so long ago that people thought Lucent Technologies would rebound from its $1-$2/share range back to the $50s+ where it had once been, yet I believe Lucent is completely gonzo or at least spun off so many times a Lucent investor doesn't have much of anything left. Same may well happen to Citi et al..

  • Report this Comment On April 04, 2009, at 5:02 PM, Whatfoolz wrote:

    Who is minding the store? Tom and David allow the shallow marketing-oriented folks, like this one, to ramp up truly foolish chatter about missing the boat. What happened to the legendary wisdom of risk-reward thinking, like "don't even try to bottom fish, rather stick with a long term strategy?" Sad, I have become disillusioned in the hype spewed out under to heading of Motley Fool, which in halcyon days dug out "under the radar" companies that proved, for the most part, to be winners. This is, for me, too freaky a market and so the conventional wisdom is to listen to the "pundits" but then make your own informed decision. CAPS has been a tremendous resource but they never ask if we missed the best week to buy stocks. So, if you are less inclined to the hype, you might look at a daily post from MF, consider the headline for what it probably is, and delete it with little fear of having lost something big. Perhaps a weekly post or a monthly newsletter from the dueling brothers (SA), might return you to a bit more sanity. Sure, they too are offering new products as yet untested. But by my paper tracking over 19 months of "add to" stocks or new monthly picks, waiting would have netted a better buy-in price overall by at least 25%. This has been a good list of stocks to watch and for me, I need to see an array of clearer signs that the water is less polluted than it still is. Many Wall St. minds still do not get it. Detroit CEO's and many from other big industries don't get it. "Royal" egos from business and government circles still don't get it. Capitalism has been in serious trouble. Peter Drucker said so decades ago. So a pendulum needs to swing back from the brink into a more contained, less toxic environment, and yes, that includes forms of regulation. The public expects it. Arrogant leaders lost the election. Now arrogant business leaders have to do the same, sometimes by fiat of the Board, or a revolt by shareholders,.

    Motley Fool's founders have helped me with my nest egg until mid 2007. Since then, we've been treading water with a list of good companies in a free fall, too early to buy. I applaud their diligence, but they do need to take back the reins from their marketing maniacs who don't set the right tone. To inform is fine, to "amuse" is part of the MF schtick, but to confound the faithful with approaches such as this and many other posts, I am at a loss here. Your money, I think, is a rather serious subject. Fools who are pitchmen seeking subscriptions have a double duty: to keep the once faithful in the fold. With little apparent oversight by once refreshingly wise brothers does give this subscriber pause.

  • Report this Comment On April 05, 2009, at 7:58 PM, tommybitt wrote:

    Hey Belzerfool,

    "...I bought ford @$1.50 and cat at $11.31 . "

    Where did buy CAT for $11.31 ???

    52 week low was $21.71

    I want to use YOUR broker

  • Report this Comment On April 06, 2009, at 10:49 PM, JJRF wrote:

    All I can say is that I have taken MF's suggestions since Oct10 2008 and built a sample portfolio consisting of 32 stocks. With the purchase of this group I put 100 shares of each stock into a portfolio to test their suggestions. The cost basis is 50,325. At todays close with a loss of 1382 the portfolio is still up 4528 with a total value of 54853.

    Thats an 8.99% gain based on buying and holding over the past 6 months while the market and S&P are down. The S&P was 822.79 today and 899.22 on Oct 10th when I started tracking the FOOL's recomendations that's a 7% decline with a 17.99% spread between the 2.

    In my actual portfolio I wish I had taken the Foolish advice, Now I am a believer and whenever they suggest a stock I do my own research but I take their's seriously. I have also taken some risks in buying companies when I see them at extremely low prices.

    From what I can gather there are two types of investments, companies which offer a good trading opportunity because of fear or bad news and then there are the companies which I want to own 5 and 10 years from now.

    If I can make some trades during these turbulent times which allow me to own the companies I want to have for the long term, that's good enough for me. They have helped me to accomplish this through the analysis they do so well and their explainations of how they arrive at their buy suggestions.

    Keep up the good work you Fools!

  • Report this Comment On April 07, 2009, at 9:39 AM, alexmills66 wrote:

    I am with salvadorviega, we have to keep our wits and preserve good gains, wait for the dive down and begin again.....

    Sell in May, dont come back till St Swithens Day, and relax for the summer? Do it early.

    Alex

  • Report this Comment On April 07, 2009, at 10:21 AM, exitplan wrote:

    I am a bit concerned about the rapid rise in March. This is coming from someone who dipped his toe back in the market on March 6 with GE,CREE,TC,NOK,SOLF. I am up around 17K yet nervous...sell or hold? We will all be asking that question over and over I fear for the next two years. So as far as GE and NOK are concerned I will keep adding to my positions and tie myself to the mast as we head into the storm.

  • Report this Comment On May 09, 2009, at 12:24 AM, TopViet wrote:

    Yes, I missed the best week to buy stocks in early March and another week in April. I'm still question should I jump in to buy the bargain stock or wait for another pull back.

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