The immediate force starting in May 2010 with which our investments may have to reckon may be deflation (lower or stagnant prices) throughout our economy and in asset classes such as the stock market, oil, silver and potentially gold.

The Dow Jones Industrial Average closed at 10136.6 on Friday, May 28, 2010. Gold closed at $1,212.20 per troy ounce and silver closed at $18.43 per ounce on this date. (Editor's note: oil traded at $74.09 when this post was written).

The stock market may continue to rise - but realizing partial profits at the present time and in the manner described below may be a way to protect your portfolio from a correction and enrich your emergency kitty. In this article, I describe price ranges on the Dow Jones futures continuation chart which may be levels to consider for such investment actions. The Dow Jones closed at 10,038 on the continuation chart on October 22, 2009.

The stock market continues to rise to a disbelieving chorus of many hedge fund managers who are simply along for the ride and a mostly noncommittal investing public. Readers of my blog may know that I am invested in equities, various mutual funds and ETFs, and gold and silver.

The Dow Jones futures contract on the continuation chart closed at 9733 on September 18, 2009. A 25-30% correction in the Dow would not be unwarranted, though it may occur from a higher price level. However, there is weekly chart support at the 8640 area on this contract and a daily support band between 8290-8415, either of which may act as a barrier to further decline should a correction ensue. I expect these support ranges should hold. Note: this website will soon present charts on a regular basis.

Both top performing former Mutual Series Funds manager Michael Price and Dreman Value Management's David Dreman concur that rising stock prices in the coming years may present opportunity for stock market profits - if you are invested in the right stocks and if you understand the economic nature of the "recovery."

Bloomberg.com reported on September 9, 2009 that Price, who sold his Mutual Series Funds to Franklin Resources in 1996, is finding value in selected equities in today's market. He sees similarities between the 1974-1982 100% stock market rise, and today's 50% ascent from the March 2009 bottom of 6469. The 1974 market trough to which Price alluded was a once in a generation buying opportunity, when the Dow ascended from a low of 577.60.

President Obama announced on August 25, 2009 that Federal Reserve Chairman Ben Bernanke would be reappointed to another four year term. Bernanke's appointment, which will likely be confirmed by the Senate, may impact the course of American economic development for many years to come.

Many observers have speculated on what form the Chairman's exit strategy from his policy of monetary ease will take - a policy that saved a select group of failing companies (and their employees' jobs) and potentially prevented a deeper collapse of the stock market and financial system.

BNY Mellon and Dreyfus Chief Economist, Richard Hoey, elaborated on the potential for a continuing bull market in stocks (though not without corrections) in an August 7, 2009 interview on CNBC. The Dow Jones industrial Average closed at 9370.07 on that date.

Hoey stated "we are at a particular cyclical moment." Further, he said that the global recession is over and that the leading economic indicators for every major country in the world are rising. "We are going to have rising real GNP for practically every significant country in the world in the third quarter," Hoey stated.

Economist Richard Hoey of BNY Mellon & Dreyfus is a veteran forecaster with many prescient calls to his credit. In an interview on July 27th on CNBC, Hoey stated that "the evidence is now clear cut" that the Fed has done enough to stabilize the financial system. He further stated that a "classic recession bottom" is in place and he expects 3 to 3 ½% economic growth in 2010.

Hoey states that "massive inventory liquidation" took place during the 2nd quarter and that auto and housing weakness was so profound that there will be no more exhaustion. He notes that Chrysler has shut down all its plants in America (a sign of the times...) and that you cannot exhaust something further that is not there. Hoey sees the roughly 20% of consumers who still have assets left carrying the weight for his projected economic turnaround.

Many advisors on Wall Street, including many mutual fund managers, many hedge fund managers and many bank trust departments, fail at their primary task: preserving and/or growing their clients' capital.

Such managers may suffer from the" institutional imperative," or "group think." This is where the players in the market may be blinded by the raw emotion (bullish or bearish) of a given market's movement or trend and act accordingly with the will of the herd.

Background: I remember in February 2007, the Shanghai market cracked, and ours followed sharply downward the next day. However, both our markets and the Shanghai Exchange snapped back shortly thereafter as quickly as they had fallen.

This was a wakeup call for me, and the first time that I questioned the American bull market in stocks that began in 2003. I wrote about this in my article, Are Stocks Still Worthwhile Investments? A Reconsideration: The Odds of a Panic, posted in April 2007, where I wrote that there may have been an "unsupported speculative fever" underlying the stock market.

Many people who place their money in the stock market are really traders rather than investors. In fact, I do not think that there are too many long term investors left after what has happened to the market in since September 2008, when the Dow Jones has fallen 6,000 points to 7,500. Long term investing has been somewhat discredited and both a well known financial commentator and an often interviewed hedge fund manager have declared end of such an investing style. See my article to the contrary: Why Long Term Investing in the Stock Market is not Dead.

The Federal Reserve was set up originally as an independent body to so that it would be free of being influenced by the winds of political opinion. Robert Reich made the point recently in his blog that the Federal Reserve has committed 2.5 trillion dollars thus far to rescue our financial system from its credit seize up and from the black hole in the housing market. Most of the Fed's actions are being done behind closed doors. This is all in the name of the "monetary ease" to which Fed Chairman Bernanke referred in a speech on February 18, 2009. I agree with Reich that the bailout process is hardly transparent, as the true eventual cost for which taxpayers may be on the hook is unknown.