Can a beginner capitalize on a bubble pop?

Question

Alot of interviews and articles i have read suggest that we are a the crest of a wave. I understand that when a market crash happens if people have the capital or are in a good position they can really captilalize on the situation. But for a new investor is this possible? If financing dries up how will a beginner get in ? Should we wait until the market crashes and recorrects to start so we dont get burned ?

David Faulkner · Answer

You never know if, when, how much, and how long a market will crash, so I don't advise waiting for a market crash to get started. I do, however, advise waiting until you are able to find or create a great deal that you can afford before investing, and those type of deals don't just fall into your lap, you must work and actively seek them out ... the sooner and harder you start looking for them, saving for them, and educating yourself on how to spot and find them, then the sooner you will find them. That can happen in a hot market, or it can happen in a crashed market, and any and all points in between, and a true investor will be willing and able to pull the trigger on such a deal at any time and any market condition. The only thing about a crashed market is that it may make it more likely to find such a deal, so in actuality it may very well take until that happens for a newbie to find one, but that doesn't mean you shouldn't look for a great deal because that hasn't happened yet, and it doesn't mean that you shouldn't invest if you find one of those before a crash happens, it just means that you should NOT buy anything at any time that is NOT a great deal, or buy anything (great deal or not) that you can't realistically afford to hold through a downturn under some reasonably bad analysis stress tests. A great deal will insulate you to a large degree from any short term market fluctuations ... in fact, that is the very definition that I use to analyze if I have in fact found a great deal ...