The Dark Side to the Rally

The close of the second quarter left the Dow up over 800 points for the past 3 months. The 11% increase for the quarter was the best quarter for the Dow since 2003. Earnings are expected to soar compared to the past couple quarters as we look toward moving past the recession. Optimism has soared as sales are up and home prices are stabilizing. So where is the dark side?

Despite the rally, the Dow is still down on the year by almost 4% and is still 40% off its 2007 high. The S&P has fared slightly better as it is up on the year by almost 2%. As we move forward with renewed optimism, we must not forget where we have been or how we got here. We cannot let good times constrict our memory from remembering the irresponsibility and greed that initially knocked us down. We must continue to rebuild and establish responsibility in our regulatory bodies. While there is cash money to be made, we cannot forget how we came to these once in a lifetime buying opportunities.