The Problem With Buying Stocks Today

As mentioned in Quinn Blunderfield’s blog post, “Opportunities for Profit in a Sluggish Economy”, many economic experts predict a decline in the American economy, and some have gone as far as to predict a fast approaching second recession. The blog post suggests purchasing stocks of public companies who are undervalued. Some experts are preaching this approach, including Warren Buffett. According to the attached article, this advice is extremely flawed. In 2008, the same strategy was promoted, just before the American economic meltdown. The article argues that single investors cannot halt the insolvency of entire European countries. In addition, the mutual funds that people like Mr. Buffett are suggesting individuals invest have large exposure to European banks. As an investor, low stock prices are attractive. However, there is a very real possibility that the European crisis continues its decline and in that case, investing would not be profitable, at least not in the foreseeable future.

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