What you should be doing now with your money

On this Sunday morning, let’s take stock of the stock market.

Despite a dreary employment report on Friday, the market closed last week with strong gains.

Even better — the DJIA closed above 8000 — making it the best four-week advance since July of 1938.

In more good news, the S&P rose 23 percent and the Nasdaq shot up 25 percent in the same four-week period.

And one of the most positive signs of all — the Chicago Board Options Exchange Volatility Index fell under the 40 mark.

So is now the time to be in the market?

Yes and no.

Yes, as I’ve mentioned several times over these past few weeks while stocks have been soaring — you should definitely be dipping your toes in — refer to my previous recent columns on my advice on how to cost leverage your way into a position.

But I’m still holding firm to the rule I had in place a full year ago and am waiting for around August/September to be more active in the market.

I don’t doubt for one second that I may miss a bottom — but I’ve never psyched myself out by missing a lowest of the low — which is a mistake many newbies make.

Instead, I feel now is the time to trust your due diligence and dip your toes into stocks you sincerely have the stomach to see get sliced and diced over the next few months, because your homework tells you they will be soaring to great heights once the fundamentals are moving the market again.

Remember, while there are suddenly a few money managers shouting “Get in now!” very few are saying to put it “all” in.

And just as many — if not more — money managers are cautioning that they feel the recent surge in the market was just a temporary bear market rally, while others feel the people who had been itching on the sidelines for so long to put some money into play couldn’t resist using the influx of funds from the fed as an excuse to jump in. And don’t forget all the institutional and short players.

Despite the vix being more favorable — we are still in the midst of a very volatile market.

The only thing in your control is taking the time to do the homework so you know precisely what and why you are buying any position you are in — as it’s the only way of knowing when and why to pull out.

New to my due diligence list — Wells Fargo.

Just remember the usual disclaimer: Don’t base any of your investment decisions on anything you read here — do your own due diligience, or at least enough homework to pick the right professional to do the investing for your.

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2 Responses

  1. Cathleen,

    Don’t mean to invade your personal life, but I’ve loved you since you started Cathleen’s Corner years ago. I’ve watched for years this little schmoozing thing Pete has been doing with you but figured it was innocent until I heard he split from his wife and was living in a 5th Avenue penthouse and dating a different supermodel every other night. Now I hear he’s supposedly serious about a girl from Boston. PLEASE tell us it’s not you!

  2. [...] mentioned in my post back in early April — I added Wells to my due diligence [...]

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