Building your Portfolio: No Better Time Than Now

Don't give up on your portfolio just because the market looks bad. This could be the perfect time to invest.

How does that old investing adage go? Buy high, sell higher? Of course not. When prices are low, it's the right time to buy. During the darkest time, you should get out your flashlight and start looking for deals.

Friends in low places

Right now, the real estate market is hitting rock bottom and the stock market is stop-and-go. Homes and land, blue-chip stocks and hyper-growth rockets, they're all starting to look mighty cheap. Your favorite investment vehicle is less important than your eye for undervalued assets.

It's easy to find beaten-down investments these days. The trick is to identify the ones that will make it through the hard times and realize their true value once again. Great management can steer a solid business through rough waters, only to come out stronger when the market normalizes again, and the less talented competition is fighting for its life. And great real estate is great real estate, even when market conditions push buyers away and prices down.

Investing decisions

If you don't feel comfortable calling the bottom quite yet, you have a couple of options. For one, you could take the leap anyway. Very few investors manage to jump in at exactly the right time, and there's no shame in getting in too early. The name of the game is to get in, because you can't make any money in the market if you don't invest at all.

Another choice is to take a hard look at alternative investments. International stocks, for example, are good bets while the U.S. dollar remains in free-fall. When the dollar drops 10 percent against the yen, Japanese investments get a free 10 percent value boost above whatever returns the stocks themselves may give.

Finally, you could simply park your nest egg in a high-yield money market account or certificate of deposit (CD) until you see market conditions that you like. Just remember the first point: don't stay out for too long. That's no way to grow your wealth, or even protect your assets from the ravages of inflation.

Retirement in mind

The younger you are, the more you need to be in the market. When you're investing for retirement, which is decades away, you can afford to take on some short-term risk in order to catch the long-term rewards.

Recessions and bear markets are an investor's best friends, as backwards as it might sound. As long as you're still looking to make new investments, you really want prices to be as low as possible, and broad market downturns give you plenty of that. Let the good times roll, but not until you've funded your nest egg. Buy low, then sell high-that's the way to riches in your golden years. Just remember to thank your friend, Mr. Bear, when you're booking that cruise for your 50th wedding anniversary.