Now Is the Time to Think Long Term and Buy Stocks

No two financial crises are exactly the same. There are times to be an observer, watching from the sidelines. And there are times to act.
A week ago Monday, when the Dow Jones Industrial Average plunged 777.68 points, the Nasdaq Composite dropped through my latest buying target, which was 2025. So I stepped in with a list of banking stocks and did some buying. The next day the market rallied, rising above the 2025 threshold. I was pleased by gains in my recent purchases, but hardly euphoric. By Thursday the Nasdaq was below the threshold. My gains were wiped out. On Monday, the index dropped so much that it was time to begin thinking of the next buying threshold, which is 1750.
So why am I buying when the market is plunging? When we're in the worst financial crisis of my lifetime? The answer is simple: That's when stocks are cheap.
Regular readers know that I follow a disciplined system of buying on 10% declines in the Nasdaq, and selling at intervals of 25% gains. These are based on historical averages for corrections (an average 20% decline) and bull markets (an average 50% gain.) The goal is simple: Buy lower and sell higher.
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