Real estate prices are down substantially and many foreclosures and short sale opportunities are out there for the picking.

Perhaps the biggest reason the stock market is a leading indicator of where the economy is headed is what’s called the “wealth effect.”  It goes something like this… When our portfolios are headed higher, we usually go out and spend like the dickens.  After all, with nice fat investments we feel like we have a lot more money to spend.  And, as well all know, spending drives the economy.  Result:  Stock prices and the economy get a boost.