Investors actually relaxed a little last week.
After a fearful couple of days in markets throughout the world, investors on Wednesday enjoyed the relief of a turnaround of more than 600 points in the Dow Jones industrial average in a day.
Suddenly, with stocks down about 20 percent in markets from France to India, the surprise rebound changed analysts' chatter from fear to buying opportunities.
It was a reminder to those ready to flee stocks that it is virtually impossible to guess when the market will be cruel or kind to investors. The market suddenly shot up last week when investors began to expect various economic rescue plans would work - including checks from the government to consumers and a bailout of bond insurance companies.
Turnarounds like last week's are the reason why financial advisers try to have clients accumulate a well-diversified portfolio of stocks and bonds and stick with it regardless of prognostications.
Still, although some analysts think the worst is over for the stock market, others remain cautious. They note that tumbling housing prices will continue to be a drag for consumers, that large financial institutions still haven't revealed all their mortgage-related blunders, and that a resulting credit crunch may be far from over.
"There is certainly no rush to do anything," said Jack Ablin, chief investment officer for Harris Private Bank.
Meanwhile, Bob Rodriguez, the FPA Capital and FPA New Income fund manager who warned more than a year ago that financial institutions were destined to choke on bad mortgage bets, is as worried now as he was then. Rather than buy stocks in this environment, he has 43 percent of his fund sitting in cash and also won't buy any corporate bonds that don't have the top AAA rating.
Jeremy Grantham, chairman of investment management firm GMO LLC, said he thinks there is just a 10 to 20 percent chance that last week marked an interim bottom for the market. He expects a "pretty painful decline" that won't be resolved until 2010.
"We are in the throes of the biggest credit crisis since World War II," he said. "There are too many skeletons, and they will keep coming out over the next one to two years."
Other managers are not as cautious as Rodriguez or Grantham.
They point to stocks that have plunged 50 percent or even more amid a global recession fear and note that investors who take chances while conditions are scary generally make the most money long-term.
For example, Carl Marker, fund manager for the IMS Capital Value Fund, said he was studying insurance companies tainted by mortgages, but had not invested any money yet.
Meanwhile, David Giroux, a well-known bargain hunter for T. Rowe Price Capital Appreciation Fund, had taken the plunge - reducing the cash he has been holding to 15 percent of his portfolio, from 20 percent.
He said there are bargains in retailers Lowe's, Home Depot, TJX, Wal-Mart Stores and Kohl's, technology giant Dell, industrial products conglomerate Tyco International, food companies General Mills and Kraft Foods and industrial companies General Electric and Illinois Tool Works.
Giroux isn't assuming the market has hit bottom, but he likes some of the recent signs. And most money managers acknowledge that a great deal of uncertainty continues to exist.
Gail MarksJarvis writes for the Chicago Tribune.