Fall 2009: Stock Market Likely to Decline

If you have exposure to the stock market, you may want to dial it back to a money market fund or cash. Both the S&P 500 and the NASDAQ composite indexes pierced below important levels of support today. (their 50-day moving averages) This often happens when the market is going to decline for a period of time.

All in all, not a terrible run since March when the market turned positive: a 58% increase for the NASDAQ and a 45% increase for the S&P 500.

Several companies declined sharply this week after reporting earnings that just barely missed estimates. Some declined even though they beat their earnings estimates. This is typical behavior when the market is turning south, when even good news is not enough to keep stocks moving up.

I have sold all the stocks in my personal portfolio and am looking now for opportunities to make money on declines.

Remember - don't blame the government or your retirement plan company if you fail to keep an eye on your nest egg!