We're in the best of time (the market high today) and the worst of time (the market is too risky now).
It is not a rational market and I predict it will dip before March 1, 2013. A rational market is 6 months ahead of the economy. The economy does not look that great compared to 2008 and all our trading partners (EU, Japan and China) have problems.
For this long period, we can say it is a market cycle: the plunge in 2007, the bottom in 2008, the recovery in 2009 and the peak now. The next plunge could be 2013; your crystal ball is as good as mine.
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Will it be a long-term problem?
It could be as our debt as a percent of GDP is too high. The more money we use to service our debt makes us less competitive globally unless our competitors have the same problem. In this aspect, China looks good.
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