For those of us who held on to our 401(k) investments and stuck to our contributions even as the market was plummeting, the rewards are nearly at hand. Looking at my 401(k) balance I was pleased to see a bit of life back in it.
The stock market is still off its highs (for NASDAQ you’d have to go back a decade to the tech bubble era), but it has made sizeable gains in a rather short time and that is cause for a bit of concern.
Many, including bank and insurance stocks, have quadrupled or quintupled in a short few months. Look are Citibank, Bank of America, or AIG. Ford is going for $8 per share now; it was barely over $1 in March. That is just not normal.
Now one could argue that the market is just correcting an extreme oversold condition that occurred a few months ago as a result of extreme fear. Maybe so, but a pendulum swings both ways and we may now be looking at extreme greed and we know where that leads to.