Now is the Time for Cautious Investing

The stock market is up in 2006 but investors should be cautious because the long-term inflation-adjusted trend is down for the S&P 500.

Prudent investors should buy stocks at good values (do not pay too much), buy stocks that pay safe and growing dividends, sell when you have a target profit (you will never go broke taking profits) and avoid managed mutual funds, particularly those with high fees. And keep a pile of cash on the sidelines so you can purchase bargains if they occur.