Short-Term Bearish, Long-Term Bullish

That pretty much sums it up. Today we are awaiting the Beige Book report, and the market is nervous that the Fed will not cut rates. Of course speculation that they WILL lower rates has fueled a recent rally. However, nobody really knows what the Fed will do. In the short-term, my best guesstimate is that the Fed will do nothing, but will mention that it is monitoring closely any fallout from the sub-prime mortgage mess.

So in the very short-term, the financial markets could be very rocky. Long-term though the markets are on solid footing with good earnings, still historically low interest rates, and good valuations. In the short term there could be a quick blip down, which I would call a very compelling buying opportunity for select Large Cap stalwarts across the board, especially in Financials, Healthcare, Global Telecomm, Auto, Semiconductor, Retail Grocery-- in other words, most of the sectors that nobody wants right now. Looking out 3-5 years, these sectors should rebound very well, and most of the companies in these sectors pay healthy dividends while you wait.