The Best time to invest in stocks

The issue is not really the best time to invest in stocks; but rather the best time to invest in stocks more aggressively. To succeed in stock investing, there are two basic signals you should watch. They can tell you when to invest more heavily in stocks and stock funds... because they are selling cheap.

Average investors should invest in stocks or stock funds on an ongoing basis, allocating a percentage of their total investment assets to this class of investments depending on their risk tolerance. Sometimes when the stock market makes you the most uncomfortable, it's the best time to invest in stocks and increase your position there. Many investors do the opposite. They sell near the bottom, take a sizable loss, and lay low until the market is well on its way to recovering past losses. That's a stock investing recipe for losing money.

If you were an investor in 2002 or in early 2009, you know what discomfort and the feeling of financial panic are. It's not easy to force yourself to buy when everyone else is running for the nearest exit. Here are two things to watch for, to give you more confidence in making the decision to buy more stocks when they are cheap.

First, you've got to follow a stock market major index,
Second, pay attention to the P-E RATIO for the major indexes. This ratio of stock Prices to corporate Earnings

The best time to invest in stocks and start some serious buying is when both of the above conditions spell STOCKS ARE CHEAP. When the major stock market indexes have taken a beating and the P-E ratio gets below 10 it's time to buy - not sell stocks and/or stock funds. Keep a level head and buy in increments with a plan.

Trust me, you'll feel some discomfort. But stock market history will be on your side.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to