You hear much on the news these days about when and IF a person should get back into the market. Millions of folks who lost over half of their 401k and other retirement accounts are wondering the same.
My answer to that question is identical to what I was advising before the meltdown - and the answer is simple:
DON'T TRY TO TIME THE MARKET
At least not with your longer term investments anyway. I have been preaching that buy and hold is dead for some time now (yes - even before the big meltdown came). The only exception to this rule might be with MLP's (but that is a topic for another day).
As index traders, it is true, we are all about timing. We look for a high probable set-up and we jump in for some quick rides, and we get out just as quickly. The overall state of the economy does not really effect our trades, so we don't have to guess if it is the right time to get into the market.
What I'm suggesting - NOT to time - is a long term entry back into the market. If you are just wanting to get back into mutual funds and let them ride, there will NEVER be a good time to get back in the market (if you are still sold on mutual funds for your retirement accounts, do yourself a favor and soak up some knowledge on ETF's -Yahoo finance is a good place to start - look under the "Investing" tab at the top of the page).
Many investors are seeing this 2 month rally and are still setting on the sidelines wondering if it is time to get back in. If they knew how to trade (what do you think the big boys are doing with your money in a back office somewhere), they would have been making entries and exits all along. We ride it down and we ride it back up! No matter what the market is doing, we can take profit.
Statistics show that over 80% of investors have no plan for making money when the market is dropping. Why put yourself in that position? If you learn to make short-term trades, you will never have to second-guess the bulls and bears. Just learn to take what it gives you (and of course my favorite way to do that is with Index Trading), and don't try to time the market!