Not only is this a rough time for the market because of volatile oil prices, an uncertain interest rate picture, and the specter of more violence in the Middle East, but we're quickly approaching earnings season. Yippee!
Mash all those things together, and we're on a Wall Street roller coaster. Motley Fool Stock Advisor recommendation Yahoo! (NASDAQ:YHOO) recently issued a profit warning because of a weakening advertising environment -- a revelation that also took down Google (NASDAQ:GOOG), IAC (NASDAQ:IACI), and CNET Networks (NASDAQ:CNET). And with commodities prices softening, both ConocoPhillips (NYSE:COP) and Devon Energy (NYSE:DVN) are off more than 15% from recent highs.
It's a crazy, mixed-up world
While it can be frightening for folks to make the one-two punch of saving and investing in a crazy market, we must reiterate that now is the time for new money. Really.
Of the 526 stocks on the major exchanges capitalized north of $10 billion, fully 55 of them are trading within 10% of their 52-week-low price. That list includes such respectable businesses as Valero Energy (NYSE:VLO) and, yes, Yahoo!
Let us repeat it
Great companies with strong business prospects are currently selling for historically low prices.
Unfortunately, individual investors aren't reading the memo. According to the Money Fund Report newsletter (as quoted in The Wall Street Journal), individual investors added $3.11 billion to their money market accounts as recently as July. In other words, that was money that individual investors were moving out of equities.
Institutional investors (e.g., Wall Street pros), on the other hand, were taking a much different tack. They withdrew $3.25 billion from their money markets, presumably to put it back to work in the market.
Now we at The Motley Fool have been known to have some fun at the expense of Wall Street pros, but these folks aren't stupid. And they're certainly not bad investors. Right now, they seem to be buying the stocks that many individual investors have been scared into selling.
Seriously, now is the time
So rather than end up on the other side of the pros' trades, take advantage of this crazy market and put some new money to work in stocks. If you're looking for a few superior businesses worthy of your investment dollars, consider joining our Motley Fool Stock Advisor service. Fool co-founders David and Tom Gardner make specific stock recommendations and share the stocks they like best for new money now. You can try their market-beating service for free with a 30-day trial -- just follow the link for more information.
This article was originally published July 25, 2006. It has been updated.
Brian Richards and Tim Hanson recommend Now's the Time, by Charlie Parker. Neither own shares of any company mentioned in this article. CNET is a Rule Breakers pick. It's always a good time to invest in the Fool'sdisclosure policy.
