When will market values bounce back? In the midst of the pain some (not all) are feeling every time that portfolio or pension statement arrives, is it time to think about adding to your investments? Not likely, is your reaction!

This author doesn't get it, you are thinking - since this week we've all been told that the US has been in a recession since December 2007. Isn't it nice to finally get the affirmation for something almost everyone knew was here?

Warren Buffet wrote a wonderful article in the New York Times, October 16, 2008. "Buy American. I am." It is a known fact that Bermudians by the droves get on planes this time of year to do just that, yet when it comes to watching the performance of the very companies that they have just shopped to exhaustion, we are unable to tolerate downturns of any kind.

It is also probably predictable right now that another whole raft of investors are putting in sell orders because they can no longer bear watching their assets depreciate further - even if only on paper. We have so many of us been through this before - remember?

Think of your coming holiday shopping days and that relentless drive in every other shopping expedition where we seek to find the best bargain ever - but we cannot bring ourselves to use the same logic with capital markets. It is an extraordinary phenomenon that has financial behaviour research scientists still shaking their heads.

Statistically and unfortunately, a large segment of investors large and small alike will continue to succumb every single time to the constant negativity streaming from financial publications and sell out - at the bottom. They have decided to take control, to put an end to the uncertainty, feeling that they even if the portfolio is managed by experienced time-trialed professional portfolio managers, this is the end of the tolerance line.

For some this will be the best decision they could make under the circumstances, if for instance, they've invested in a levered fund under redemption attack. And it is equally true that others may live to regret a permanent loss in value of a long-term well performing globally diversified index fund.

Now that I have earned your annoyance, why would I encourage this thinking? Investment markets can be driven as much by about perception as they are based on real facts. In the last couple of weeks, there has been a steady drumbeat of comments: "market bottoming, valuations cheapest in 40 years, we are on the turn, could be time to go back in, lots of cash sitting on the sidelines, mortgage refinancing going up in the US, first sign of a comeback and on." Is it time?

No one can say for certain, but why not start now by doing a bit of research locally and putting small amounts back in over time. There is no question that many good securities are very undervalued. And that ultimately the market will come back - here also is a good opportunity for you to read up on business and economic cycles by visiting a basic investing website such as www.smartmoney.com or www.thefool.co.uk. Smart money even offers the chance to run a mock portfolio.

Since you may be feeling somewhat uncertain, where should you start stepping back into the markets? A good asset allocated fund, otherwise known as a managed portfolio, with a slant toward the more conservative side is a good choice. These mini-portfolios that are professionally managed hold a globally diversified combination of equities, bonds, alternative class, and other straightforward strategies - i.e. balanced, moderate etc.

They should be reasonably and comparatively priced, as well as providing you with recent fact sheets, a prospectus and the terms and conditions to purchase or sell them. You must make it clear to the financial representative that you cannot tolerate much risk and that this fund cannot have exposure to all of the credit liabilities and leverage that have taken down so many well known names.

Quite a few of the financial institutions in Bermuda offer this type of investment fund for the small and tentative investment. The minimum amount for entry is usually manageable; consider adding to it in small increments over the next year.

Warren Buffet wrote a wonderful article in the New York Times, October 16, 2008. "Buy American. I am." His holding company, Berkshire Hathaway is legendary for outperforming the S&P 500 index for more than 30 years (see chart). A few more encouraging words from Mr. Buffet: "The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

"So ... I've been buying American stocks. Why? A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense.

"These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records five, ten and 20 years from now." Even with these words of wisdom from the 'Oracle of Omaha' - his stock is down this year too along with the Harvard endowment - you won't see them selling out. There will be some of you who have been badly burned in this market, and will avoid investing again. If you have not lost significant amounts - that you cannot recoup - perhaps this is the time to re-evaluate how you allocated your resources, where you invested them, what type of advice you received, and then draft a new investment plan - that will better match your risk comfort factor.

Don't you think it's time to put one toe in the water? Only you can decide.

Martha Harris Myron CPA -NH1929, CFP® -67184 (US licences) TEP - Society of Trust and Estate Practitioners. She is a senior wealth manager at Argus Financial Ltd., specialising in comprehensive financial solutions and investment advisory services for individual private clients and their families, business owners, endowments and trusts. DirectLine: 294-5709. Confidential e-mail can be directed to mmyron@argusfinancial.bm The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product. The Editor of the Royal Gazette has final right of approval over headlines, content, and length/brevity of article.