Global stock markets have surged almost 10 percent in the past week, said Jonathan O’Shaughnessy in Seeking Alpha, and people are starting to ask if it is “finally safe to invest in stocks again.” Investors have been caught in a “fake bear market rally” for months, so skepticism is understandable. But things could be different this time. Banks such as Citi and JP Morgan are reporting “positive signals,” including profits, and economic indicators are finally turning positive.
The equities rally looks pretty impressive, said Mark Hulbert in MarketWatch. “But bear market rallies always do.” The Dow Jones industrial average is up 13 percent now, but it jumped 20 percent last November, before crashing again. How can you tell when the market has hit bottom? If investors quickly declare that “happy days are here again,” stocks probably have further to fall.
Investors face two powerful, conflicting facts, said Brett Arends in The Wall Street Journal. Many stocks are “incredibly cheap,” but the economy has also gone “from bad to much, much worse.” The “latest surge” may be real, or another bear rally. But you shouldn’t care: Trying to time the market is “folly.” People don’t earn fortunes trying to catch the market bottom, but they often lose them that way.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- How academia's liberal bias is killing social science
- 43 TV shows to watch in 2014
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- Hey, bosses: Stop giving bonuses to your employees
- What would a U.S.-Russia war look like?
- Why the Sony hack changes everything
- Why torture doesn't work: A definitive guide
- Diagnosing the Home Alone burglars' injuries: A professional weighs in
- You should be furious about Hollywood's gutless retreat on The Interview
- How to make the ultimate grilled cheese
Subscribe to the Week