By Douglas Goldstein, CFPâ

I don’t want to age you, but do you remember the crash of the U.S. stock market in 1926? How about 1933?

I just picked up a great piece about the five best historical periods to enter the U.S. stock market. As always, past performance is no guarantee of future returns, but it certainly was interesting to note that in the three years that followed the drop of 1926, and in the three years after the 1933 market fall, U.S. stocks (as represented by the S&P 500 index) shot up by 176% and 195% respectively.

I showed Sandy Ohana, my office manager, the short article and she commented, “I guess people really thought the stock market had gone on sale, so they went shopping.” Why do people frequently buy stocks when they are trading at highs? It’s because of an unusual psychology that gives them a sense of comfort to jump on the bandwagon. In fact, however, the smart move is to invest when the market has suffered losses.

Take a look at your own financial plan and see if it’s appropriate for you to own stocks. If so, consider that this year, 2008, the market had its worst calendar-year opening in 75 years. It fell over 9% in the first two months. That was the worst start to a calendar year since 1933 (-17%). But then again, after the 1933 collapse, the market rallied strongly. Could that happen again? Only time will tell.

Who knows if the stock market has reached its bottom? Keep in mind that when the markets fall, there are often good investment opportunities before the market recovers. So speak to your financial adviser to see if he suggests that you go bargain hunting. If you’d like to read the article about the “Five Best Periods to Enter U.S. Stock Market,” call and we’ll send you a copy.

Douglas Goldstein, CFPâ, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc. Member FINRA(formally NASD), SIPC, MSRB, SIFMA. Accounts carried by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company. His book, Building Wealth in Israel: A Guide to International Investments and Financial Planning, (with a guest chapter on taxation by Leon Harris, International Tax Partner, Ernst & Young) is available in bookstores, on the web, or can be ordered at: www.profile-financial.com, (02) 624-2788 or (03) 524-0942. Building Wealth in Israel, ISBN 193268784X 308 pages