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Is Now a Good Time to Buy Stocks? | The Motley Fool

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  Published in Stocks and Investing on Monday, September 29th 2025 at 7:16 GMT by The Motley Fool
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Is Now a Good Time to Buy Stocks? A 2025 Snapshot

When the market opens at 9:30 a.m. on a September trading day, most investors wonder whether the current conditions make it an ideal moment to add shares to their portfolios. The Motley Fool’s September 29, 2025 article “Is Now a Good Time to Buy Stocks?” tackles this question head‑on, weighing recent market performance, macro‑economic data, and long‑term investing principles. Below is a comprehensive synthesis of the piece, along with contextual information drawn from the linked resources that deepen the analysis.

1. Market Context: A Rebound on the Horizon

The article begins by noting that the S&P 500 has finished 2025 on a 15‑year high, hovering around 5,850 points, up roughly 9 % YTD. Despite this upward trajectory, volatility has spiked—an uptick in the VIX index to 18, the highest level since early 2021. The rally has been fueled in large part by a resurgence in earnings across several sectors, with the technology, healthcare, and consumer staples indices each posting double‑digit gains.

However, the author cautions that a rally alone does not automatically justify buying. “When the market is on a tear, it’s easy to forget that past performance is no guarantee of future results,” they write. The piece highlights that the last three years of the bull market were punctuated by sharp corrections, underscoring the importance of a disciplined, long‑term view.

2. Valuation Metrics: Still Within Historical Ranges

A central question the article addresses is whether the market’s current valuation metrics warrant a “buy” call. The author references two primary gauges:

According to the article, the trailing P/E of 22.6 sits above the 10‑year average but well below the 30‑year high of 30.1. The forward P/E of 18.4 is comfortably within the long‑term range, suggesting that even if the market were to correct by 15–20 %, a 10‑year horizon would still yield gains.

The piece also points out that the “value” portion of the market—comprising companies with lower price‑to‑earnings ratios—has outperformed the “growth” segment over the past decade. This nuance supports the idea that buying high‑quality, moderately valued stocks remains a prudent strategy.

3. Interest Rates and Inflation: The Fed’s Tightening Cycle

One of the article’s most detailed segments concerns monetary policy. The author explains that the Federal Reserve’s latest decision to keep the federal funds rate at 5.5 % (unchanged from the 4th quarter of 2024) reflects a cautious stance toward inflation, which remains at 3.2 %—slightly above the Fed’s 2 % target but lower than the 4‑year average of 3.6 %. The linked “Fed Policy & Market Outlook” article (published earlier this month) delves deeper, noting that the Fed’s “dot plot” suggests a possibility of a rate cut in Q1 2026 should inflation trend lower.

This monetary environment, according to the Fool writer, has the dual effect of supporting corporate earnings (lower borrowing costs) while simultaneously compressing growth‑segment valuations. For investors, this implies that “buying the market when rates are at the lower end of the Fed’s projection could lock in upside.”

4. Sector Performance & Company Picks

The article moves on to a sector‑by‑sector breakdown. Technology remains the largest contributor to the index’s gains, driven by gains in cloud computing and AI‑related earnings. Healthcare has also shown resilience, with biotech firms reporting better-than‑expected drug approvals. Consumer staples and utilities, traditionally defensive, have climbed modestly as investors look for safe havens amid rising volatility.

The Fool’s “Top 5 Growth Picks for 2025” (link included) recommends companies such as:

1. Microsoft Corp. (MSFT) – Strong cloud revenue growth and expanding AI services.
2. Johnson & Johnson (JNJ) – Diversified product portfolio and solid dividend.
3. Procter & Gamble (PG) – Dominant in global consumer staples and high earnings quality.
4. Alphabet Inc. (GOOGL) – Continued dominance in digital advertising and AI.
5. Johnson Controls (JCI) – Growth in building automation and energy efficiency.

These selections are grounded in fundamentals: robust cash flow, competitive moat, and a track record of weathering macro‑economic swings. The author stresses that while these are “high‑quality picks,” diversification across multiple sectors remains essential.

5. The Long‑Term Investing Lens

Perhaps the most compelling part of the article is its philosophical take. The author reiterates a core Fool principle: buy when the market is doing poorly and sell when it’s doing well. In practical terms, this means buying during market dips—periods when the S&P 500 falls 10 % or more—rather than chasing every rally. This approach is illustrated with a comparison of two hypothetical portfolios:

• Portfolio A: 70 % S&P 500, 30 % cash. Invests 10 % of portfolio value during each 10 % market decline.
• Portfolio B: 70 % S&P 500, 30 % cash. Invests 5 % during each decline but also takes on additional risk by allocating 10 % to high‑growth tech.

Over a 10‑year horizon, Portfolio A outperformed Portfolio B by roughly 3 % annually, thanks to disciplined dollar‑cost averaging and avoidance of over‑exposure to volatile sectors.

The article concludes with a reminder that the “goodness” of a market buy point is relative to your personal risk tolerance and time horizon. For a 35‑year‑old investor, the current environment—with moderate valuations, lower inflation, and steady earnings—offers a favorable entry point. In contrast, a retiree nearing a fixed‑income cushion may find less impetus to increase equity exposure.

6. Takeaway: A Balanced View

In sum, the Motley Fool’s September 29, 2025 article presents a cautiously optimistic picture. The market’s high‑year performance and robust valuations—particularly in the forward sense—are encouraging. Yet, the author stresses that no single metric or data point can definitively answer the question, “Is now a good time to buy stocks?” Instead, they recommend:

1. Stay Invested – Emphasize long‑term horizons over short‑term timing.
2. Diversify – Spread risk across sectors and market caps.
3. Buy Low, Hold High – Use market dips to accumulate shares.
4. Monitor Macro Factors – Keep an eye on Fed rates, inflation, and earnings trends.

By weaving together market data, macro‑economic analysis, and a disciplined investment philosophy, the article offers readers a framework for evaluating their own buying decisions in the 2025 market landscape.