The economy is showing some signs that it is stabilizing. Housing sales seem to have turned the corner. Sales are up, from 1963 levels, if you call that up, and unemployment is stabilizing with now over 6 million unemployed and rising but maybe at a slower rate.  The news isn't good but it is not as bad as it has been and maybe better than people expected.

The bottom line is that investors feel this is not the end of the world and the worst is over. They feel that the programs that the Fed and the World governments have put into place, although controversial,  will prevent a complete systemic collapse at least in the short term.

So, as they say "Don't fight the tape" and the tape is moving up which translates into buy now before you miss out on the opportunity of a lifetime. This is the psychology that is driving the markets this week.

I think we have to buy but at the same time keep a good reserve of cash on the sidelines. We could see a continuation of this pretty significant rally but there will still be lots of opportunities even if we miss out on the "bottom".  I prefer corporate and municipal bonds of somewhat lower quality. I think the best way to enter the high yield market is through an ETF or a fund. Yields run from 8-12%. Preferred funds are also paying about 10% in dividends. Beyond that - just about everything is a good buy as long as stocks continue to rise. In other words, everything has been beaten down. I like the dividends simply because in a flat or downward market, at least there is some offset and I have a big tendency to be conservative.  

Please note: The above comments are simply opinions of the writer and do not represent a recommendation or solicitation. Please do your own research or consult with your trusted investment professional before making any investment decisions.