Forget all the wrangling in the financial media about whether or not stocks are in a bear market.
All they're really talking about is whether or not the Dow is down 20 percent from its closing high of 14,165 last Oct. 9, and whether or not the Dow is down 19.5 percent (not a bear market, say the pundits) or 20.1 percent (now that's a bear market, the pundits proclaim).
Either way, it won't make much of a difference to your investments.
And that's the key. Just because U.S. stocks have fallen off (and are still going down) doesn't mean your investments have to be.
Owning an Oil Company?
Oil has been going up, and if you think it's going to keep going up, you can own oil through United States Oil fund (or USO), an exchange traded fund (or ETF) that tracks the price of oil. (Keep reading for more on what an EFT is.) Or, you can own oil companies through their stocks, or through mutual funds, and so on.
The point is, keep an eye on what's going on. You don't have to limit yourself only to the U.S. stock market. If you think gold will rebound, you can buy it through another ETF known as GLD.
What are ETFs? Well, exchange traded funds are essentially funds which act like stocks. You can buy and sell them throughout the day, or you can own them as long as you want.
You can find ETFs for all kinds of investments. In addition to oil and gold, as I mentioned, they also exist for international markets, specific stock sectors (like coal or nuclear energy), and so on. They're well worth your research (and there are far too many Web sites devoted to them for me to list here).
Stock Market Woes
But what about the stock market?
So far it's generated some buy signals… but they haven't taken hold, at least not yet. I would want to see the Dow get above at least 12,600 to say we're out of the woods. That's the upside.
On the downside, we could go to 10,700, and perhaps lower.
The market is being hit by both higher oil prices and the credit crunch on Wall Street. The fact that it's only down around 20 percent shows how strong it really is. It could be a lot worse.
Once oil eithers falls back or levels off, and the Street finally believes the end of the credit crunch is in sight, then, hopefully, better days will be ahead.
In the meantime, take a look around, and see what investments work best for you.