Government bonds (not munis) and cash are the safest investments now; foreign currencies, gold and silver should be okay. Myriad factors are churning just out of the radar and market risk is very high. I am not being an alarmist, just issuing a strong opinion that severe market fluctuations are a real possibility.
Do not panic. If I am wrong, so be it. I have been easing out of stocks over the last 20 weeks and have been increasing investments in safer asset classes. Now, I am winnowing my holdings in oil stocks as well in preparation for an economic slowdown or recession.
The best appraisal is from Tim Iacona (read the entire article for an excellent review of the current economic reports). Excerpt:
As if the dismal reports on housing, producer prices, and economic growth were not enough, there was even more bad news elsewhere last week. The mood of the American consumer is now quickly souring, the slowdown in manufacturing is accelerating, the labor market is showing increasing signs of trouble, and personal income and spending both disappointed.
Granted, plenty of market strategists and financial planners inexplicably see the current market as oversold and presenting a buying opportunity. I would respectfully disagree. To wit, from Barry Ritholtz:
...consider the following headlines:
My favorite is "Bush: US not headed into a recession"; Ha! Doesn't that pretty much guarantee it?