I started warning investors about the brokerage and financial stocks back in June 2007 and again in August 2007 . Since then I've continue to state that I would stay away from this sector until we have some idea how deep the subprime the debacle goes. There is a good possibility that we may see a bounce up to the $29 to $32 area, but the trend continues to remain down.
If you are a long-term investor who is strictly investing in mutual funds or ETFs that mimic the general market, and have a long-term horizon over three to five years, the recent action will likely look like a small blip on the screen. However, if your focus is anywhere between intermediate- and long-term, then it will be important for you to pay attention to what the market is saying to avoid taking unnecessary risks and losses . Unless we see some catalyst that can inspire the market to move dramatically higher, the current rally will likely give investors a chance to raise cash in order to have better buying opportunities in the future. This column was originally published on RealMoney . For more information about subscribing to RealMoney, please click here .