Sometimes the Hardest Thing to Do Is Nothing

Yes, I've had money on the sidelines as the market has been rallying the past couple weeks. The urge has been there to join the party. But sometimes the hardest thing to do is nothing at all. So I'm sitting this traders-rally out. There's still too many questions from a geopolitical perspective. And I'm not sold that the consumer is back as advertised. Moreover, retail investors like you and me have yet to participate with scarce money coming into equity funds.

But mostly I'm looking into the future earnings expectations for the S&P 500, and what I can see is some pretty lofty numbers. Going into this summer Wall Street is forecasting a double digit growth in corporate operating earnings, about double what earnings have traditionally grown between the first and second quarters of the year. Let's keep a close eye on Federal Express, which reports earnings on Thursday, for some clue about the accuracy of this estimate.

For now, I'm with Pimco's Mohamed El-Erian, who said today Investors Must Keep Cash, 'Retain Optionality'.