The time to buy stocks…

… is not when the S&P 500 is up 6%. There will be down days of 2-3% when further news comes out of some catastrophe occurring, but the markets are now going to be in a “two days down, three days up” mode for the indefinite future as the waterfall of ZIRP money hits the market.

Now is the time to take a look at the individual components of your portfolio. Things that are trading at a P/E of 20 might not look cheap, but in a zero rate environment, it’s better than the alternative! If you have stocks that are up above the average, ask yourself why, and then consider adding when we get one of those down days.

Likewise, if your stock is down on a day when the main indicies are up heavy, ask why and guess whether there will be a ‘regression to the mean’. If your stock is fueled by index purchasing to begin with, then momentum trading is the way to go.