Tuesday, April 13, 2010

Is it time to get out of stocks again?

Daniel Solin wrote a pseudo-alarmist piece for Daily Finance, “Three Reasons to Get Out of the Stock Market Now” yesterday, here .

The headline caught eyes on Yahoo! yesterday and reminds one of an alarmist interview in early October where Mad Money’s Jim Cramer told Ann Curry on the Today show that stocks could drop 20% in the near future, but look where they’ve gone instead. (The Dow has risen 68% since the low in March 2009). At the time, Cramer told investors they needed a five year time horizon to stay in stocks. (The link to that story Michael Inbar had been here ) Cramer believes that the debt implicit in the bailouts and deficits will catch up with us.

But Solin’s reasoning is that most amateur investors don’t have the expertise to predict stocks without a great amount of risk. They are better off with bonds and money markets.

Early Tuesday morning reports indicate that earnings for the first quarter may not be as good as expected and stops could drop today significantly from Monday's 11000+ close.

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