Wednesday, August 19, 2009

The Market, The Market

So what do you think about the stock market these days? It's been climbing non-stop since March. OK, there was a little hiatus in June, but investments I made in early March are now up more than 50%. My 401K is now well above break even. Our total portfolio is only a few percentage points down compared to where it was since this crash began. Truth is, I am getting nervous.

Just like I said that things weren't that bad in the dark days of February, they aren't that great now! BTW here's a post I wrote in early March preaching the upside of stock investing, just a couple of days before the market started bouncing back. No special powers of prognostication here, just simple coincidence.

The stock market upsurge has me just concerned enough that I have halted all new investments in the market (except for my 401K contributions), since the beginning of May. OK, there's also the small matter of my preparations for the possibility of buying a house, but even if this were not the case I think I would have paused for a while. I don't like this euphoric mood.

Yes, I believe we are done with the recession, but I don't think that euphoria is called for. There is still much economic risk out there, including risk to our currency from the twin scourges of inflation and deficit.

Curious to hear your take on the situation.

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frugal zeitgeist said...

I'm investing only in my 401(k) for the moment, but for different reasons: There's a mongo management layoff in the works at my place, so I'm busy piling up extra cash. Early signs are that I'm *not* going to end up on the unemployment line, but I'm not ready to count on that just yet.

Were that not the case, however, I'd also be cautious now. I don't think we're out of the woods yet.

Shadox said...

I thought your company was doing OK. But I guess these days no company is really doing that great.

Glad to hear that you think you'll survive the lay-off. It sure is a tough job market out there.

Rob Bennett said...

My view is that the dominant factor is investor emotion. Humans are only able to take in so much bad news at one time -- we have defenses that block out knowledge of the full story until we are able to accept it. I believe that we have so far let in about half of what we ultimately need to let in to begin a process of rebuilding the U.S. economy.