Have you been wondering if it is a good time to invest in the stock market? Have you thought about liquidating all your stocks? Is the stock market artificially inflated?
I have been asking myself these questions for the past few months, but the stock markets have me really scared. I am having a really hard time figuring out what is helping the markets sustain their current levels.
On March 9, 2009 the Dow Jones Industrial Average closed at 6,547.05 and has risen to 12,907.94 as of March 8, 2012. The stock markets have continued to climb while the economy still struggles. To me, this doesn’t make sense. I am extremely happy for people that were able to turn their 201(k) back into a 401(k). Although, these people need to be careful and possibly think about shifting their portfolio away from equity investments and more into bonds and mutual funds. These assets are much less risky and if the stock arkets start to drop then your wealth won’t go with it.
I am usually a very optimistic person, but I feel my pessimism is warranted. The housing market is not likely to recover within the next year. This year could be one of the worst years for foreclosures. Additionally, there are not enough qualified buyers to purchase the surplus of homes. The unemployment rate is still high at 8.3%. The average gas prices as of yesterday for regular unleaded was $3.76 and it continues to climb. The consumer confidence index is still fairly low. The financial woes in Greece and Europe are also very concerning. These are just a few reasons why I think the stock markets will not be able to sustain their current levels.
I am not posting this to try and scare you. I am doing it to make you think about where you have your money invested. I mentioned in an earlier to post to avoid becoming greedy in the stock markets. Take your winnings and walk away. If you are thinking about investing, I recommend you do your research and tread lightly.
What do you think the markets are going to do? Am I off base with my pessimism? Let me know what you think.