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 to be the most productive person in your office — and still get home by 5:30 p.m.
- 43 TV shows to watch in 2014
- How liberals are unwittingly paving the way for the legalization of adult incest
- Ted Cruz is the new Sarah Palin
- How the Simpsons/Family Guy crossover revealed the worst of both shows
- Watch out, China — America is working on dogfighting drones
- Libertarianism's terrible, horrible, no good, very bad idea
- 6 things the happiest families all have in common
- Bill O'Reilly and Stephen Colbert are accidentally having a serious debate on ISIS
- Why you probably don't have Ebola — even if you shook hands with America's 'patient zero'
Subscribe to the Week