21 Mar 2003 Is Confidence Returning?

Stock market history can be very useful as a guide in developing portfolio strategy, but it should never be used as a precise predictor of the future.  It repeats itself, just not in the same way or at the same time.  In 1990, the S&P declined over 20% in the weeks following the invasion ofKuwaitbyIraq.  But it did not rally in 1991 until it became clear to investors that the coalition forces would be successful in turning back the Iraqi invaders.  The S&P increased by 18% in just three weeks following the market low on January 15,1991.  This time investors did not even wait for the war to start.  In the past seven days the S&P 500 and the Dow Jones Industrials indexes have risen over 5%.  Global markets are reacting positively as well.