As the rally continues, I trail the market for this year more and more. I’m a non-believer. I think the stock market has gotten ahead of the real economy. Personally, I’m at about where I was before the crash, and I count myself lucky for that. Going forward while I continue to be predominantly invested, I’ve begun to acquire some put options on both the NASDAQ and the S&P 500 to hedge my position.

With these options in place I expect that my overall portfolio is likely to move sideways regardless of what the actual market does. I’m willing to take this certainty in what I think remain uncertain times.

We have averted a real crisis, and the economy is I think in reasonable shape. However, there is still a financial reckoning. I believe the days of unfettered consumer debt are over as it should be. The end of easy credit however means that consumption will be down, and consumption is 70% of economy.