ClusterGains

The Federal Reserve is still helping to prop up the stock market in various ways.  There will be volatile days whenever they start to talk about raising interest rates, but we will probably be safe until the Fed funds rate gets to around 4%.  There is an old saying that "stocks will grow when interest is low, and stocks will die when interest is high."  This principle is still true.

Another thing to watch is the chart action of the S&P 500.  Whenever the S&P falls below its 200 day moving average, it may be time to get out of stocks until it rises back above the 200 day line.  To confirm this situation one way or another, you could look at how the economy is doing according to the Federal Reserve.  I have links to the Fed on the Federal Reserve page listed on he left.  If the economy is still doing good when the S&P 500 falls below the 200 day line, it may be a false selling indication.  It may be a buying opportunity instead.  Always consider several factors before buying or selling.

As it was mentioned on the home page, diversification of some kind should be implemented in any portfolio.  It is also wise to be in cash or bonds at certain times.  Nobody can pick the exact top and bottom of stock market cycles.  However, I firmly believe you can make double digit returns year after year if you will protect yourself in times that are statistically bad.  One Wall Street saying is "you can't go broke taking a profit."