I am not sure how any one can say recession or depression is ahead.
Markets don't go down without a fair degree of trouble and an even larger degree of pessimism and press to boot.
I have been around long enough to have fallen for the talk several times. If the ecomomists can't figure it out and neither can government and business, then listening to the bearish or bullish writers won't help you either.
What I do know is that mostly it will be worse that the optimists and better that the pessimists.
I thought the early 80's bear was going to last longer and the '90's and the '00's.
A normal bear is about 12 months and the very worst is 3 years. Arstrong would say the bear started in Feb 2007.
The US had a 3 year bear just this decade and to expect another that size is against the odds so soon.
Sure this may be a once in a thousand year event perhaps but the "muddle through" scenario is the most common result.
Preparing for the worst is certainly prudent but locking yourself in to a fixed position is a bad recipe.
Even 3 year bears are never without serious rallies in price and time.
Even should fundamentals get even worse don't for a moment think that that will stop a huge and lengthy rally at some time.
Because markets are looking way ahead, they will rally when the world seems to be falling apart.
They may get it completely wrong and eventually have to catch down, but trying to position yourself based on the current woes rather than market action is unwise IMO.
One factor to keep in mind is the cash still sloshing about.
It will go somewhere and authorities have little control over its destination.
The other factor is sentiment and that is herd driven. When the bell wether turns the flock will follow, whether it is over a cliff or into the abattoir or to green fields, and no reasoning will stop them.
One simple rule I try to follow is to do what seems the hardest when my TA says so. When a market goes up and and all I can imagine is that it is a trap, then I have to do it anyway. If I let my worries hold me back till all my fears subside then I have missed the best part of the move. If I let good fundamentals hold me back when the market is falling then the same applies.
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