Thursday, May 20, 2010

Are We Worried?

Just read this at the Wall Street Journal:
Stocks Fall as Strains Accumulate

Here's the opening sentence in the article:

"U.S. stocks tumbled, leaving key indexes on pace for their first correction since rallying from March 2009 lows."

I took the poll asking "Is the Market in for a Long Correction?' I voted no. The results through 1:18 PM were 60% saying yes, it will be a long correction. Let's hope the pessimists are wrong.

I also took the second poll which asks "Which is Having the Greatest Influence on the Dow? I answered "Global Bailout" which had by far the most votes.

So are we worried that government debt problems in various countries around the world will cause a secondary recession? In a word, yes. Not being concerned about these debt problems would be foolish. However, being worried or concerned does not mean we should panic. Instead, we need to understand the scope and magnitude of the debt problems, and then determine if we should then change our investment strategy.