A rAlly in A BeAr MarKet?

The current rally in the stock market has given a lot of joy to some investors but several market analysts have cautioned against aggressive engagements as the economic fundamentals and export data are not yet that encouraging, though US job data in first quarter 2009 appear to point to a recovery. Some people opined that stock market precedes these data by three to six months... hard to believe unless you have been studying the market trend under different circumstances over the years... Warren Buffet's domain!

Some stocks in Bursa Malaysia have outperformed the market, rising rapidly from their 52-week lows by large margins. While other low beta stocks are underperforming and tactically safer to purchase now and keep for the longer term. The KLCI has gone over 1060 well below Fibonacci Retracement target level of 1080 at 38.2% according to a recent survey by Malaysian Business. So what do a minnow investor like me do? First I have missed the rally... now I have to wait for that predicted fierce selling-down..... fear and a wee bit greed?... But, hey, remember this is an all-weather investment strategy and not for short-terms gain... so no sleepless nights, thank you.

The same situation is apparently happening in the US, the current stock rally seems to be resilient despite the uncertainties of the market recovery. Fund managers said they were bullish and yet nervous at the same time. The rise in stock prices seem to defy logic and some market watchers have expressed concern whether it is now nearer to a point where smart money is getting out and dumb money is rushing in. Investors taking a short position have to be cautious because buying stocks at this stage may not achieve your desired risk/reward ratio. A rally in a bear market is exciting but small investors , especially, will need to monitor market behaviour very closely lest they lose their investment at the blink of the eye!