I just finished reading about America's very public plans to invade Iraq sometime early next year. I need not tell any of you the implications of a full-scale invasion of Iraq. Certainly, the stock market's ills can be related to handwringing over what economic impact such a war could have. The historical perspective again tells us that stocks, and probably the economy, will be weak going into such a conflict and only when convincing victory seems at hand will things begin to improve.

Unfortunately, all this means the investment outlook, particularly over the next 12-18 months, could be even worse than what I depicted in my last missive. With war being telegraphed so far in advance, it is hard to project what the overall effects will be, but certainly the energy sector is likely to remain strong (scandal and debt-ridden companies excluded). Greenspan will be further hamstrung in any attempt to raise interest rates since skyrocketing energy costs will further suppress the economy and make it very vulnerable to such rate hikes. The resulting inflation and low or no economic growth could bring us the stagflation the staunchest bears have been predicting. We also have to face up to the frightening prospect that terrorist activities could increase within US borders causing disruptions up and down all levels of our society.

Essentially, things are likely to get MORE difficult moving forward. The future is hazier than ever. Only visionaries will be able to look back on this tumultuous period as a time of economic opportunity. As individual investors, not to mention individuals period, it is difficult to dedicate the time and effort to step up to that level. And I feel ya on that. What's worse is that too many of the professionals we would like to rely upon are either compromised on an ethical level or are perpetually crippled by their stubbornly unfettered optimism --- both dynamics have cost a lot of us too much money already.

Be careful out there indeed...