The royal wedding, eliminating the notorious mastermind of the Sept. 11 attacks--this is going to be a week to remember forever.

But I also wonder whether it might represent another milestone.  The markets have come back almost 100% since the 2008 meltdown; in fact, it could happen today.  The S&P's low two years ago in March was 683.38, and the market was standing at 1366.76 at the very moment I wrote this column--two points away from a 100% recovery.  (And, alas, still a ways from the 1561.80 high in early October 2007.) 

In the May issue of my Inside Information newsletter, I talked with Rudy Aguilera, of the Ironclad Funds, which may be the only fund in the world that invests primarily in the CBOE's Put-Write Index, which basically sells protection against downside volatility.  Aguilera cites research that the Put-Write Index tends to outperform the market as a whole because investors generally expect more downside volatility than they actually experience, consistently, month-to-month, week-to-week.

But...  Lately, he says, risk has been priced remarkably cheaply.  The VIX (fear) index is way down, which seems to mean that the majority of investors think this market rise will continue indefinitely.

Which means the "wall of worry" is gone.

I want to say up-front that I'm not a market timing professional, and have little insight into the future of stock prices.  But everything I know about stock market history tells me that this is exactly the kind of time when investors get an ugly surprise--a market pullback, either temporary or long-term, that reminds us all that we don't know as much as we think we do.

And when I look at the economic fundamentals, I see improvement, but I have to say, the economy doesn't look THAT good, good enough to justify a doubling of stock prices.

Is anybody else worried?  Is anybody else taking some of your clients' gains off the table?  I'm not recommending this; I'm asking if maybe I'm the only one who's worried, and whether this is even a question that advisors should be asking themselves.

What do you think?

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