Many of us expect the stock market to decline in anticipation of a weaker economy, due to falling housing and thus falling consumer spending.
But: where will the investor put their money when they are fearful of recession? As of now, they are loading full force into the Blue Chips, the Dow 30 companies.
The money has flown out of real estate, and into the stock market. Today, WalMart had a bad earnings report, and that is going to be the beginning of the bad news coming out of corporate America. But the stock market can only go down, IF and ONLY IF investors sell their stocks. If investors stay in stocks, the stock cannot go down.
Why shouldn’t investors stay in stocks? Where else to go? Gold? THey are fearful of the volatility. Treasuries?
If you can predict where the mutual funds and hedge funds and big money goes, you can get in early. If they stay in stocks, maybe it was bad to sell our stocks, bec. stocks will keep rising.
