Last week US stocks rallied sharply capping their best week since February, after Corporate America posted results that beat analysts’ estimates.

“But don’t mistake a bear rally for a new bull market,” says Eric Roseman.

“No matter what happens in the short-term, most stocks will be poor investments over the next several years as inflation, deflation and a long-term contraction in bank credit slow the world’s largest economy to pre-1995 levels.

“I still think this market will form a bottom sometime in the fourth quarter — not before. But even then, I don’t expect a bull market to return because the contraction of credit has fractured the economy, corporate earnings and the consumer. It’s hard to be bullish on the market for an extended period especially when oil is trading north of US$100 per barrel.”

“Great investments are made during bear markets, says Porter Stansberry. “Great investors earn their reputations during bear markets. The fortune you hope to gain from the markets will be made by what you do during bear markets. It’s easy to buy and hold during good times. It is much, much more difficult to put money to work in critical situations when you have to go against the crowd and your own fears.”