Last summer I discussed my misgivings about the market run-up and how I thought we were due for a stock market correction. Obviously, there was a slowdown last May because of the Federal Reserve lowering the fed funds rate. My discussions came after this, because I thought more downturns could follow because so many factors were against stocks continuing to do well. I was wrong.
However, the past few months I have had the feeling we are due for another stock market correction. Unemployment is low, stocks are doing well, but not many other economic factors are trending well. Iraq continues to seem to get worse and more expensive. The housing market is taking a once-in-a-generation hit because prices were inflated and many sub-prime borrowers have defaulted.
I still own individual stocks, but I have sold most of them. I still hold mutual funds, and I always do for the long term. But I might sit on the sidelines for a little while to see how things shake out the next weeks and months.