Take a look at the first quarter market numbers if you dare: The Dow is off 7.9 percent, the Standard & Poor's 500 has fallen 10.4 percent, and the Nasdaq, the key barometer of technology stocks, has tumbled a staggering 14.7 percent.
Depressed yet? Well, so much for the bad news.
The good news is that most of the damage reflected in those numbers was done during January and February, and momentum in March has many analysts looking for better days ahead.
While the major indexes are down slightly for March after Friday's sell-off, there is a broad consensus that the market has found a bottom and is ready for what likely will be slow but steady progress ahead.
"There's still going to be caution, it's still going to keep the market at bay, but the fundamentals are not bad," says Peter Miralles, president of Atlanta Wealth Consultants. "It's a good time for investors to be accumulating investments for the third and fourth quarters."
So what's got everyone so excited about such a moribund market?
For one, analysts see financials, which have essentially been circling the drain for months, ready to come back now that the worst has washed out with the crumbling of Bear Stearns, in the process of being purchased by JPMorgan Chase.
Various other sectors, from consumer staples to utilities to telecomms and other tech areas, have bounced well off their bottoms and found momentum through March.
Commodities, which sizzled in January and February in part as a hedge against a weak stock market, have come back to Earth with most, outside of still-strong oil, showing either modest gains or losses over the past month.
Feasting on Financials
The confluence of events has many investors scouring the market for an entry point.
"The markets have felt like a many-footed monster with lots of dropping shoes, and Bear Stearns was the last major shoe to drop," says Diane de Vries Ashley, managing partner at Zenith Capital Partners. "What we're suggesting to our clients is they look a little bit more optimistically and contemplate taking some of the excess cash that they've had for a while and gently but fairly steadily put it into the market.
"I wouldn't go rushing in, but we're certainly seeing signs of a little bit of a bottom."
Like many others, de Vries Ashley is taking a look at real estate but also sees a wide opening in financials right now. Friday marked another big day for news in the sector, with Citigroup advising clients to buy Lehman Brothers stock and Citi itself announcing an aggressive restructuring plan.
Nadav Baum, managing director for investments at BPU Investment Management, has favored the sector for months, even through its deepest turmoil, but prefers large-cap commercial institutions like Bank of America and JPMorgan Chase to the investment banks.
"I'm still buying high-quality financials. You've just got to be patient," Baum says. "I think the key to this thing is staying well-diversified, knowing exactly what your goals and objectives are and what your risk level is. How comfortable are you with volatility? If you can identify those pieces you become a very successful investor because you don't let moves like this in the market dictate where you're going with your money."
Technology is another area drawing wide attention from money managers. The sector as a whole tumbled 15.57 percent in the first quarter but actually is up 0.67 percent for March. Telecomm has fallen slightly more than the broader technology issues for the quarter, but is up a robust 3.53 percent over the past month.
"I just think it's more of the fact that you can't have another Bear Stearns," says David Rovelli, managing director of US equity trading at Canaccord Adams, who sees opportunity in tech stocks. "As long as we don't have another big bank blowup I think we're going to be fine."
In a broad sense, investors are looking for the most beaten-down areas as pivotal points to put their money. But there continues to be enthusiasm for emerging countries that are snapping up US goods and helping drive commodity prices.
"These next three months are very hard to guess, but the fundamentals are there for recovery," Miralles says. "A recovery is not going to be driven by what's going on here in the United States. The recovery is going to be the emerging markets out there, the emerging middle classes. They got a taste of three meals a day and want to keep eating three meals a day."
One market getting some attention is the Mideast, where oil exporters are driving the economies there forward.
"My advice about the US markets is to diversify outside the US, because there are so many fundamental issues with our markets and our overall importance and place in the global economy is not what it once was and unlikely to return to where it was," says Bruce Fenton, president at Atlantic Financial.
"The US, despite its problems, is still a very large and important economy, so you should have some exposure, but typically American investors are overexposed and not looking enough outside the US."
Diversity, always popular with investment consultants, is getting an even broader focus in the wake of this market's high volatility.
"Right now is a very good time to evaluate who you are as an investor and your risk parameters," Baum says. "Once you do that there are some very good opportunities out there."