According to Warren Buffet's own metrics, it might just be time to start buying stocks. As Fortune explains, "The point of the chart is that there should be a rational relationship between the total market value of U.S. stocks and the output of the U.S. economy." Not exactly a shocker.Nevertheless, Buffet asserts, "If the percentage relationship falls to the 70% to 80% area, buying stocks is likely to work very well for you." Well guess what? That's where we are right about now.
According to Fortune, Buffett has at least begun to put his money where his mouth is. Buffet went on record in an October 17, 2008, New York Times op-ed piece, saying that he was personally buying U.S. stocks after a long period of owning nothing but U.S. government bonds, (outside of Berkshire Hathaway stock). "He said that if prices kept falling, he expected to soon have 100% of his net worth in U.S. equities."
100% in equities is bold, but Buffet may be on to something. If I had any money to invest I would start putting it into the S&P 500, dollar cost averaging of course to dampen volatility.
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