Tue 5/8/12 2:38 PM – Stocks Head Lower

Last week I had a post that included the phrase deja vu, the feeling that we have seen or experienced something before. If you are a fan of the movie The Matrix you know it as a sign that something is not right.

Well here we are in mid-May 2012 and both the economic picture and the stock market picture are eerily the same as 2011 and 2010. In all three years economic data was strong to start the year, the market did well and late in April they hit their highs for the year, ending it with a bottom in the fall.

One of my favorite quotes on history is from Mark Twain who said that history doesn’t repeat itself but it does rhyme. While you can only know if we hit the top in April this year by looking back from the end of the year, or at least late in the year this year so far is uncannily similar to the two preceding it. Of course, in addition to the economic numbers losing momentum you still have the same European problems as the last two years.

We are a little underweight in stocks and we are tilted toward the conservative side in most of our picks so that is standing us in good stead right now. We’ll see how it goes.

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