Is it time to buy stocks?
The volatility of the stock market is being reflected in the values of 401k retirement funds. Your Third Quarter statement for 2008 will be a shocker. Your savings of the last two or three years have been wiped out by the falling values of index funds like the S&P 500 which is the basis of many retirement plans.
The companies that have survived the financial collapse of the sub-prime mortgage industry may offer some opportunities for investment. Warren Buffet has a good track record of investing in solid companies. Warren Buffet just bought General Electric (GE) stock. In October 2007, a share of GE stock was above $41 Dollars. Today, a share of GE is at $22 Dollars. GE is a diversified company involved in technology, media, and financial services. It pays a dividend of $1.24 per share which translates to 5.1% at today's prices. This is not bad considering that bank savings accounts are paying miserable rates way below 2%. GE is a good buy with a Price-to-Earnings ratio (P/E) of 10.31 and $2.15 earnings per share (EPS).
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