Is This Rally for Reals?

Probably not. But what do I know?

For more authoritative opinions, check out this roundtable over at NYT between Simon Johnson, Nicholas Bloom, and Barry Ritholz about the market's rally since its March 9th low. Johnson's all doom and gloom; Bloom's a bit more measured in his take on the situation; Ritholz offers investment strategy more than analysis of the virtues of this recent rally.

(Although Ritholz seems to offer somewhat contradictory advice. If buy and hold is a "losing strategy" in a bear market, then why does he say "For many investors, dollar cost averaging into broad index funds works well" and then actually suggest that they increase their investments during major downturns like the present? "If you want to be a bit aggressive, you can increase your contributions once the markets fall 30 percent or (like now) 50 percent." I think the key here is the difference between active traders and passive buy-and-hold investors - active strategy will change depending on the market situation; for most average investors, passive dollar cost averaging is the way to go regardless of market conditions. And indeed in the case of the latter, increasing that investment during major downturns is a way to pick up extra shares on the cheap.)