Investing in the stock market

This week I finally bit the bullet and opened a trading account (TD Ameritrade, in case you're wondering, but that's neither an endorsement or a criticism.)

Why invest now? Well, why not? One thing I've realized after looking at the whole thing over the last few years is there's never a "right" or "wrong" time to start investing, you just have to be careful with your strategy and not expect to make a million dollars over night. The two major strategies I'm going with are:

• "Averaging" - invest a fixed amount every {fixed time period} rather than looking for some magical time to invest a lot of money. Averaging is pretty much the only way to play unstable markets. It works on the basis that when the market is down a certain percentage, you lose less money than you gain when it's up a similar percentage. eg: Invest $100 - market loses half its value, you lose $50. Invest $100, market doubles in value, you gain $100.
• Dividend stocks and ETFs only

Now, the latter probably seems superficially sensible, but nonetheless there are deeper reasons why I'm investing that way.

The problem with the economy right now is that most businesses aren't seeing demand. The lack of demand means companies are sitting on cash they don't really know what to do with. Large companies are sitting on large piles of cash, and that cash pile is growing, but they see no reason to spend more because they're selling pretty much all they make.

(This, incidentally, is why that "encourage companies to bring money back from their overseas subsidiaries" thing is not as useful as it sounds. They may physically bring the money into the US, but at best they'll simply hand it over to their shareholders. It is emphatically not going to be used to create jobs.)

Now, this means a number of things, but critically it means that investing in stocks that pay dividends right now is a good idea, because dividends are high, and will continue to be so, even if the market crashes again.

So, anyway, that's what I invested in. And I'll continue to add to the portfolio for a few years, and see what happens to it. Now's the time, especially if, as seems likely, the economy starts to nosedive like it's 1937 all over again.