While one of the most difficult things to do is forecast where the market will be heading over the coming months, I (and one of my most respected hedge fund managers) am now of the opinion that we have seen the lows for the year. After emailing with several money managers, it appears this could be the case, based on the amount of fear in the markets, the fact that the economy (despite high unemployment and a lackluster housing market) is still growing-albeit at a slow pace, and the financial system is viable and doing fairly well.
I'm certainly not saying that the volatility and the wild swings up and down in the stock market will subside, on the contrary I expect such to continue for the remainder of the year as traders and investors struggle each day to digest all the economic and corporate news releases. In the paragraph above when I mentioned the elevated amount of fear in the markets, I gave that as a reason why the markets may have bottom because when you look back over time, stocks bottom when fear is rampant and they top out when there is little to know fear...once again, buy at the sound of cannons (when things are ugly and fear is commonplace) and sell at the sound of trumpets (when everything seems to be coming up smelling like roses).
My message is simply that barring a catastrophic event or unforeseen development, it seems we have likely seen the year's lows, and though I expect the volatility to continue, I suspect the worst could be behind us...
