I get frustrated when strategists point out that there's little correlation between what the stock market does and how optimistic consumers feel. Virtually everyone is involved in the market -- at least tangentially. And it's only natural to think twice about every purchase you make when the value of your investment portfolio is declining by double-digit amounts. Just ask the folks whose loans are tied to severely under-water stock options: Negative debt positions have a funny way of curbing spending.
Before making any stock market investments know exactly what you expect from those investments. Have the patience for the investments to fulfill the expectation, and the wisdom to know exactly how the investments will fulfill the expectation.
A forethought example:
I want every stock market investment to supply me with ever-increasing cash for the rest of my life. I want my retirement investment portfolio income to grow until the income from my portfolio replaces the income from my job when I retire.
Step 2 is to then determine the market trend for the area for which there are two critical pieces: 1) is the average price increasing AND 2) is the volume of sales increasing. If both are moving in your favor, then you have the comfort of knowing that the right trend is in place to keep prices moving forward. In stock market investing, there is the saying that the trend is your friend and traders frequently observe price and volume data to confirm the trend. If a hotly priced real estate market shows signs of dropping in volume, be very careful.