“no reason to buy is reason enough to buy”

Treasury Secretary Paulson always good for 100 points to the down side on the DOW once again made a failed attempt to reassure markets that someone in Washington actually knows what they are doing, but alas the markets weren’t buying. Students of market physiology would suggest that “no reason to buy is reason enough to buy” so perhaps an over sold condition coupled exhausted sellers may produce a reflex rally at this juncture. There are 4 ways in my view to play this: 1) the long term short ie... investing in the decline of the market thru indexes 2) Investing in quality stocks and bonds that pay excessive dividends and interest hoping to out last the return of the “Carter administration” 3) the market will from time to time offer unusual high risk trading opportunities due to excessive volitility and 4) safety would suggest that unless you have at lest a 4 year horizon best to allocate more money to cash

Sometimes market events are bigger than any of us. The stock market has gone through a period of major turmoil and in the trailing 12 months has the S&P 500 down a sizable 37.47%. There have been major dislocations in the economy especially in finance and banking. A complete crisis of confidence has griped both the government and private sectors. The bond market, mortgage market and commercial paper market have frozen. Even money markets have broken the buck and banks have failed. Large government initiatives have been needed and shot gun weddings have been manufactured to prop up the ailing bank and brokerage sectors. The worse financial crisis since the 1930’s has left little growth in any type of investments.