Making Sense of This Market

The Fed's surprise rate cut may help calm the markets. But in the meantime, sell risky plays and move into high-quality companies.

Financial bubbles never unwind in an orderly way, and now we contend with two -- a housing bubble and a credit bubble, both ending badly. Today the question is not whether the stock market and the economy will be hurt, but how much.

One bad sign: Economist Ed Yardeni, known for his optimistic outlook, in mid August doubled (to 30%) his odds of a recession in the next six to 12 months. Odds of the stock market's setting new highs again this year are slender indeed.

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Row 0 - Cell 0 Wall Street Manages a Late Turnaround
Row 1 - Cell 0 Investors Guide to Volatile Markets

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Editor, Kiplinger's Personal Finance