December 2014 – Q: We have taken your advice and now have a significant amount of money in cash. But now what do we do?
A:I assume you are asking if now is the time to get back into the stock market. I would say this: There are still important reasons to be concerened with the future of the market.
Contrary to what you may be hearing from others, the fundamental economy has improved little. The markets continue to be propped up by the Fed, and the Fed apparently stands ready to continue giving any kind of support the markets may need to allow them to rise. The problem is that if they continue to go up, this will be based on false positives.
I am encouraged by the low gasoline prices and am sure this will help somewhat. On the other hand, I’m discouraged because I know that the discretionary income generated by low gasoline prices will be eaten up by higher taxes and utility prices. Therefore, I believe we must continue to take a wait and see attitude before rushing back into the markets.
