My Advice

Just watched Jim Cramer's Mad Money. You know, the guy who says "There's always a bull market somewhere." Sorry Jim, you're wrong.

Global equity markets are going down. I've expected this for some time. Just didn't realize how far up they'd rise before then on nothing more than the strength of the Federal Reserve's so called "Quantitative Easing 2" or QE2 program.

Retail investors just aren't getting back in the game. I for one have been taking money gradually out of the market since the beginning of the year. My family's sitting on a cash cushion of about 50%. Not that I'm happy about earning next to nothing in a non-FDIC insured money market fund. But the options of locking away my money at 1% a year in a CD don't offer a viable alternative.

So, I guess you could buy gold, which has started to uncorrelate with the broader stock market. For me that's just too speculative at these levels. Just look what happened to silver prices at the beginning of May.

The only real alternative is to hedge aggressively. As I said, I'm heavy into cash, but also have money in large, mid and small-cap funds as well as international exposure. I like Invesco Dividend Investor (LCEIX) for stability and dividend yield. My mid-cap money is in Scout Mid Cap (UMBMX) and small cap is in Royce Value (RYVFX) - although I'm keeping an eye on Royce since lately they've been underperforming their benchmark.

Hence readers, I'm seeing this shaping up for the future: More wrangling over the debt ceiling, a default in Greek debt, other European debt downgrades, China inflation persisting, U.S. inflation creeping up, no relief on the jobs front, oil prices coming down slightly on weakening demand, the federal reserve weighing another round of easy money and the media being consumed with political rhetoric ahead of next year's election.

Unless Uncle Ben and the Fed step in soon to offer relief or Congress raises the debt ceiling soon, the stock market is heading lower. I'm thinking this second quarter earnings season is going to be a disappointment too. So taking money out of the market now is a safe play.

For me, I'm 50-50. Jim Cramer had one thing right last night. The only way out of this mess is lower stock prices. S&P 1000-1100 is when I see the next bull market.