WEEKEND INVESTOR --- Should Small Investors Jump Into Stocks?
Since hitting a low in February, the stock market has roared higher in almost-uninterrupted fashion. The Standard & Poor's 500 has racked up a good year's gain -- nearly 13% -- in just two months' time, and now, near 1200, sits at levels not seen since September 2008. The Nasdaq, meanwhile, has turned back its clock to June of that same year -- three months before Lehman Brothers collapsed.</br></br>Yet many small investors are still watching the rally from the sidelines. Through mid-April, investors have put about $6 billion of new money into domestic stock funds so far this year, according to Lipper data. By contrast, they've invested just over $101 billion in taxable and municipal bonds.</br></br>So is now the time to wade back into stocks?</br></br>Perhaps -- if you're looking to put a little money to work in well-run, large companies with strong balance sheets. But many pros say investors who've sat out the rally should continue to husband their cash. With the market up so strongly, and with underlying economic fundamentals still sketchy -- foreclosure just surged again, underemployment remains rife and consumer sentiment has fallen again -- the balance has shifted toward risk and away from return.</br></br>Even the pros seem to be getting twitchy. News Friday that the Securities and Exchange Commission has charged Wall Street giant Goldman Sachs with fraud tied to subprime mortgages helped push the Dow Jones Industrial Average to a quick 126-point selloff.