5 Lessons From the Last Stock Crash

Stocks celebrate with a record rally, but could we be heading for another miserable fall?

NEW YORK - OCTOBER 09: A trader puts his hand on his head on the floor of the New York Stock exchange October 9, 2008 in New York City. After a day in which the markets showed early promise in gains, the Dow fell 678 points, falling below 9000 points at the end of the trading day.
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Forecasters are still positive even after the market's quick move into uncharted territory. The S&P 500, which started the year at 1,426.19, has risen 9 percent, which means it is already near the 10 percent expected for the full year that many had forecast. Added to last year's gain, it is now up 25 percent. Still a number of top investing houses have readjusted higher in recent weeks to the 1,600 level, including Wall Street heavyweights Goldman Sachs and Morgan Stanley. They cite the relative health of the economy and earnings gains that will make the overall valuation of stocks reasonable.

"The best-performing stock market timers remain markedly more bullish than the timers with the worst historical performance," says Hulbert. And often they are right. But definitely not always.