It bears remembering that the stock market is forward looking (about 6 months), so if you expect interest rate hikes in the later half of half of 2010, keep a close eye on the exit door when summer comes around.

In view of the challenging times ahead, I believe the stock market is too optimistic with its valuations of 15-25 times earnings. Stocks have rallied aggressively since March. Most of them are trading above their 200-day moving average and with no sign of slowing down. In this kind of bullish environment, fundamental analysis seems really foolish. A monkey, with no baggge of knowing how bad things really are, could have made huge profits just by throwing darts in the dark.

It is a matter of time before we experience another major recession because the key lessons from this financial crisis were forgotten easily and people are back to their greedy speculative ways. But the next time round, the Federal Reserve may find its hands tied, with very few options available.

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Six things I learned from the financial crisis
7 Dividend Raisers during a financial crisis
The Next Big-Gov Bailout
Read more on 2008 Financial Crisis at Wikinvest

I won’t be looking at stocks for a while. Inaction is a decision too when it comes to safe investing. Of course, you can always add to your portoflio if you are a long-term investor. For the time being, I am keen to accumulate gold. We may still be in a deflationary environment but the impending inflation from all the printed money is no laughing matter.

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How Jim Rogers Invests In Gold
Embrace the Sell-Off in Gold
Read more on Gold, Inflation at Wikinvest

Time flies when we are having fun… we are now into the 13th week of a stock market rally that started in March. The embers of the stock market rally has not flickered out entirely but there are signs of investors taking some profits off the table.

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