Below are questions I'm struggling to answer that might provide some clarity on the signifcant declines we've seen in the markets:
- Why is the decline in the markets seemingly picking up steam?
- Why are so many market participants and observers talking about the U.S. falling back into a recession when the economic numbers do not point to or foreshadow such?
- When is the financial instability taking place in Europe going to subside?
- Why, when our financial system is stable and improving slightly, are the bank stocks the worst performing market sector...especially when they are so cheap?
- What catalyst(s) is it going to take to reverse the decline in the markets?
Until I can answer some of the questions I've posed above, I would recommend investors keep the majority of their accounts sitting in cash. Other than that, in the fullness of time, we will see that stocks are priced too cheaply and represent extreme value.
