That means a 100 percent or more gain in a year. And despite recent losses, the market is still in good shape in historical terms. For now, says Wachtel, individual investors should be very selective in their investment choices. The market is still volatile, and there are still many companies that remain vastly overvalued. No one is forcing you to buy into the market.
Value stocks are companies trading at levels below the intrinsic value of their total assets.
Although carefully monitoring her firm's assets under management, Farley is now feeling better about the market for the next few months. Short of a possible slight uptick in inflation, she sees nothing on the economic horizon that suggests major difficulties for the market through the remainder of the spring and summer. The challenge is that the spring-summer period is historically one of only tepid market gains. James Stack, who publishes InvesTech , a market newsletter in Whitefish, Mont., agrees. That means that anything unusual, such as an unexpected political or economic occurance, can turn the market upside down during those months.