I’m excited. Really, really excited! Value is starting to appear in the stock market and I want to buy buy buy. It’s at time like these I take a deep breath and look at the big picture.

The GFC saw the S&P/ASX All Ordinaries Index 24% lower than Monday’s close. Major banks like Australia & New Zealand Banking Group (ASX: ANZ) were 30% lower based on price to book. Those falls didn’t happen overnight. During GFC1 the All Ords collapsed over five months, falling 26% from October to March. That was after the market had tumbled for a year from the peaks in 2007.

All ords PER long term chart

Source: Data – Colin Nicholson, chart Motley Fool Australia

Keep your eyes on the horizon and fuel in reserve.

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Dean Morel is The Motley Fool’s Investment Analyst. In the interests of full disclosure, Dean owns shares in Australian companies, but not ANZ. The Motley Fool’s disclosure policy is as sane as they come.

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