Anyways, I think it is important to open up a discussion with all you smart folks about HOW AND WHY the US stock market has been on suck a tear over the past couple of months.  If you made some good decisions 3 or 4 months ago, your investments are probably up 50% or more!

IF you believe that the US stock market is a “leading indicator” for the US economy, this run in the market would lead you to the conclusion that we are heading out of “The Great Recession” post haste…THE TROUBLE I have with this theory is that our home values are still falling, so the US consumer is feeling a negative “wealth effect”…also stunting our growth is the fundamental shift from consumption to savings.  I believe that most sensible people are going to save more and keep real tabs on their spending habits. 

I also fear that mutual fund managers have been chasing returns, and this is artificially pushing up stock prices ahead of the actual earnings growth of these companies.  (I hope I’m wrong though and that good companies were just SOOOO oversold that we are getting back to fair value)

All this to be said, I’m loving the run up in stock market values, but I’m worried that the market is getting ahead of its self and banking on a sharp uptick in the overall US economies growth and consumer spending. 

Do you guys really think that is going to be the case, or are we looking at a major pullback soon?  Will $3.00 gas pull us back down?  As always, any and all feedback and ideas are appreciated.  There is SO much knowledge left in the comments of this blog!

This word is all my little brain could register when I pulled up my retirement account at Firstrade today.

I’ve been a licensed securities broker for almost 9 years now, and I NEVER saw this coming. 

Buy and Hold index fund investing is officially a TRAIN WRECK if you started in about the last 12 years or so.  I’M REALLY GLAD for all those variable annuities that I sold between 2003 and 2007…as most of them had GUARANTEES attached to them that may end up being EXTREMELY VALUABLE TO HAVE!

I HAVE NO ANSWER to my title question, and no one else does either.  As a student of history and economics, I know this type of market meltdown has happened before, but the variables are so different now.  And don’t turn on CNBC, because that will just give you a headache.  They will have “experts” on their shows back to back who will completely contradict each other.  Both, probably very smart people, are understanding our current economic realities in TOTALLY different ways.  BRIGHT SPOT THOUGH…MOST EVERYONE SEEMS TO BELIEVE IN THE LONG TERM SUCCESS OF CAPITALISM AND OF THE UNITED STATES!

I’ve posted several times regarding the auto industry here in Michigan.  Since then, we have seen GM and Chrysler receive some federal money to try to keep them afloat. 

Ford Motor Company appeared to shy away from federal dollars and put up a good front that they had everything under control…we don’t need any bailout money. 

Based on this, I’ve had friends invest significant dollars into Ford Stock.  They believe that by Ford not taking any federal money, they are proving that their company is in good shape and on a smooth path for future profitability.  I DO NOT BELIEVE THIS TO BE TRUE!  Here is why…

I believe that Ford has taken a “calculated risk” in deciding to put their best foot forward to the general auto buying public.  Ford is trying to convince us that they are operating “business as usual”…”no need to worry here”…”Come buy cars from us, we will be around to honor warranties!”  I DON’T BUY IT.  The public records that make their income statement and balance sheet open to observation lead me to believe that Ford is in a world of hurt, just like the other guys. 

My point is to look hard and do your own research before investing into individual companies.  The last 6 months have proved that his can be risky business!