The question that is foremost in the minds of investors at all times is what is the good time to buy stocks. When the market is bullish and prices of stocks are high, investors tend to invest huge sums of money. It is definitely a good idea to invest when the market conditions are good. Investors always gain from such transactions at such times.

However, when the market shows a bearish trend investors become skeptical, asking the question ?is it a good time to buy stocks?? In fact during economic slump, people tend to invest only in fixed equity rather than floating stocks for the fear of losing money. Contrary to the popular belief, it may actually be a good time to buy stocks and make long-term investments to make the biggest gains by thinking ahead.

History suggests that investors who had made long-term investments during the economic downturn of 2003 or the dotcom bubble burst have been the major gainers in terms of profits. However, it is good to take some precautions while investing in such times.

1.It is very important to invest only in shares of large companies. These companies, with a history of rejuvenating and tiding over bad times give investors the assurance that they will actually recover tiding over the downturn. These large-cap shares are the ideal candidates for investment at such times.

2.Next is that those companies which pay dividends mostly have good stable businesses. Moreover, dividends that investors get help them to tide over the ?bad times.? It is always a good time to invest in high-dividend-paying stocks during recession.

3.Another trick of the trade to make such conditions a good time to invest is to invest in small proportions and not in huge amount for a single stock. At this point, it is good to chart out an investment plan for each company and distribute the investment. Moreover, a company which may be showing a very low stock price at present, but is a big name and has a good history of recovery may sought for more investment from the investors. Looking at various factors, the investor has to take this decision prudently.

4.It is also a time to making long-term investment with the vision of making good investment in the future. It has been seen that a bullish trend is followed by a bearish trend and vice versa. So an investor investing in stocks supposed to bring benefits after say 4 years, gives the stability that the market will recover and the money will not be lost in the downturn.

5.Also, when the prices of usual stocks start falling, it may be a good time to invest in other kind of stocks that will never be out of demand. For example, gold stocks or oil stocks can be very good investment options at such times.

Thus, we see that every market situation offers something new for investors. Experienced investors, who have witnessed the fluctuations in market trends over years, know that it is all about taking the right decisions at the right time.