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Is it a good idea to invest in mutual funds, specifically total stock market index funds?

with all the talk on the news about a possible recession i dont know if its a good idea to invest in mutual funds.

Public Comments

1. It might seem counterintuitive, but recessions or overall weak ecomonic conditions are often the best times to invest! The reason is that economies dont dwell in recessions forever. Eventually the economy recovers and the stock market grows again. That's what's happening now. A big concept to realize is that the stock market discounts future events. That is, before things actually "occur" the stock market has already accounted for it. The subprime bubble and related economic slowdown started in February 2007. Thats when the stock market started to buckle and stopped going up. The low point occured relatively recently in March or so. Now, while the economy is essentially in mud, the stock market is forecasting that things will get better in the near term. So while the ecomomy might be in "recession" it is a great time to buy a stock mutual fund. My two cents: buy!
2. It's always a great idea to invest in Mutual Funds. The market is always looking ahead & if you try to time it..... you'll lose a large amount of the "upside". Besides, this is a long term commitment (10 years or more). You'll never know the right "time to invest"..... but you'll be there when you should. The two most important things to follow for sucess in Mutual Funds are; An "asset allocation" which you follow strictly. Low internal fees & no load funds only. Read some books. Start with "Mutual Funds For Dummies". Index funds are good, but not always the "answer". The S&P 500 index funds have performed poorly for the past 10 years. Keep to an "asset allocation" model that works for you & combine (eventually) managed and unmanaged funds).
3. For long term return, yes, stock index funds are a good investment.
4. The answer "Common Sense" provided is excellent! I would agreee and reiterate: it is always a good time to invest in mutual funds and to do so regularly to take advantage of dollar cost averaging. I have invested in Vanguard for nearly 30 years. They are the low cost leader and provide excellent customer service. There are other companies but check the fees. Vanguard is about 1/5 of most other mutual fund companies and in fact is a "mutual" company. All the shareholders are the owners so you reap the benefits. http://www.vanguard.com Also, as CS said: read as much as you can. Vanguard (and I suspect others) have online resources to help educate the investor.
5. A recession will be good, and technically stock prices will rebound faster than the dollar values will in a full-blown recession. I believe that you should be prepared to take a dip. You can take precautions like buying puts against that index, in the event that it loses money you can still profit and hedge your investment. Note that if you do buy the puts, and you still have a loss, that loss will not be tax-deductible for that reason.
6. Yes, I agree with everyone here that the down market is the best time to invest. Louisa blogger http://industrysectors.blogspot.com
7. The down market is the best time to buy. However I would not buy an index fund as it will emulate the index. I want a fund that will outperform the market. American Funds are really good.