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All of the major stock indices are near the upper end of their recent trading range perhaps signalling that a little profit taking my occur. As we have been stating over and over again, we believe that the “flash crash” low of around 9750 on the Dow remains a VERY attractive long-term entry point. Barring any unforeseen economic, corporate or geopolitical news, we continue to believe that still to be the case. With the Dow nearly 900 points higher, what should investors do? We recommend that they be patient in through here. Pick and choose your spots, be it mutual funds or stocks and look for some weakness.
Regarding bonds, we continue to believe that high-grade corporate bonds, some (may we emphasize some, meaning no more than 7.50% of one’s portfolio) high-yield bond funds and government agency bonds.