Wednesday, October 8, 2008

I haven't posted investment advice lately, because the market is being uncertain, to say the least. Rather than heading straight up, most investors have been subjected to head-spinning, shockingly swift downward results in their portfolios.

We would prefer to be in a healthy market. Even most gold funds, our usual friends in market routs aren't buoying up as they have in the past. GLD, the SPDR Gold Trust (ETF) (NYSE) is an exception.

The market is still going down, and there is not any clear indication to me that it is heading up again soon. Of course, it could. Eventually, it will.

I keep reading the (now gloating) writing of Tim Knight at his blog "Slope of Hope" For instance, now he is saying that we are setting "ourselves up for the greatest trading environment for bears of all time". He tends to be mostly bearish while I prefer to accentuate the positive. Here is a chart of the S&P 500 down over 20% since September 1, 2008.

Seriously, okay, the stock market is bad, really bad, but it can't last that way forever, and it is certainly not the fault of any one individual money manager. History will dissect and take apart this market downturn, and show that there are very few bull funds that have gone up, probably none.

Those who have become accustomed to supporting an uptrending, seemingly healthy market by depositing hard-earned savings are being challenged and disappointed more than ever before by this market environment.

Few of us were even around during the fabled Great Depression. This is the worst most of us know, and it feels a lot like the aftermath of September 11, 2001. It's different because it's financial, and there is so much diffuse weakness all around the country.

Will commercial lenders help small business owners make their payroll? If first time homebuyers can't get mortgages, the entire line-up of mortgage lenders and those with any connection to real estate in any way, shape or form feel the pain. Who will get elected, and how will their administration handle the war in Iraq and the federal deficit?

Ginormous questions, so much uncertainty, and we must wait for the answers. But we will, and there are now exceptionally fine buying opportunities.

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