The market discounts the economy by 6-12 months.
At this point, you should not fear equity investing. You must realize, the average retail investor is his own worst enemy. I've been managing retail accounts as well as instiitutional accounts for over 10 years with Prudential and now UBS. Almost invariably, retial investors make the absolute wrong decisions. They buy into rally's and sell into fear.
The indexs as whole, mean nothing. They are simply benchmarks upon which one MAY measure their investment portfolio's performance. Doing so often provides inaccurate readings.
Currently, I am recommending my clients overweight Basic Materials and Information technology, underweight consumer discretionary and Consumer staples and market weight in Financials, Industrials, Energy, health care, utilities and telecommunications.
Corpoarte America must step up on physical capitol and labor. Otherwise, a sustained recovery will be postponed. However, it may be Main St. America Ie small firms, that once again quietly get the ball rolling on hiring. The recent new tax legislation may help this process begin, and big business, as it did 10 years ago, may sumply be waiting for someone else to make the first move in net new hires. If Main St. America steps up, you will see an ever more clear picture of a recovering economy.
Dow 10,000? It's just a number for th papers to print.
Allocate your assets wisely, dividing among equities and fixed income, based on your risk/reqard profile.
Allocate your equity holdings among sectors that have been depressed, and will do well in this current economic enviorment.
Then allocate your sector holding by corporate capitalization.
Stay the course, never give in to fear and greed, and you'll do well.
