Bull Market

When do you know it is safe to buy stocks? Bull markets primarily occur when interest is low, when housing sales are increasing, and when unemployment is dropping. We only have one of these necessary factors for a bull market in August of 2011, low interest rates.

If we did not have the low interest rates, it would be an all-out bear market instead of just a marginal bear. This is a situation where you should sell the rallies to make a small amount of money, to break even, or to take a small loss. Eventually, you will make money on leveraged ETFs like ERX if you have bought low enough.

Another bad thing about the current market is that you cannot go all-in on shorting the market either. With the Dow sitting below 11,000 we are probably at the bottom because the bad news is not really the end-of-the-world hype. So, it is a waiting game. Another question is how high can the bull rallies go in this kind of market?

The bottom line is that you cannot buy and hold growth stocks right now because they will not go anywhere of significance. Bonds and REITs seem to be the only investments that are relatively safe currently. I recommend AGNC, ARR, JNK, and RCS if you want to collect some interest money.