Jeremy Grantham: “Pull the trigger”

In a Fortune article about how the market is hitting new lows, Jeremy Grantham predicted we will see a material new low (HT Paul Kedrosky).  He’s talking about 600, or mind you, 450 on the S&P 500.  Now, that’s low.

Nevertheless, he’s fairly bullish here. Grantham says buy and hold is not a problem for long-term investors with stock prices at these levels. One should start buying and stick to a strict buying program here.

“If you don’t have a schedule for investing, you will not do it,” he says. “When the market goes down, it reinforces the hoarding of cash. By the bottom, you suffer what we called in 1974 terminal paralysis — you cannot pull the trigger. Almost everyone who avoids the great pain is very slow to get back.”

In a nutshell, he’s saying, “Buy low and sell high.” Everyone knows that is what you are supposed to do but fear and greed usually prevent this from happening. Right now, the market is all about fear. Unless you schedule your investments, you may find yourself incapable of pulling the trigger in a falling market.

Source
Tracking the bear: How bad could it get? – Fortune