It's way too early to say the "global economy" is on the rebound, Jim.

The truth is, the global economy is just starting to feel the impact of the credit crunch.

Until a few weeks ago, there were none of the telltale signs of a recession: mass layoffs, reductions in consumer spending, etc. You're starting to see that now: Yahoo! cut 10% of its employees recently, and consumers tightened their belts substantially in September.

But the economy rebounding? I don't think so. It hasn't even started to stall! Q3 GDP growth was 2+% in the U.S; I doubt we'll see that level again for a year or more.

What I do think—and what I think you meant—is that the global financial system is on the rebound. The trillions of dollars governments have thrown at the credit crunch is starting to cure the liquidity crisis, as shown in the TED spread, which narrowed again yesterday.

But major risks remain. Hedge funds suffering from terrible returns and large-scale redemptions are one big risk. I'm also worried about the holiday season, which I think will be the worst one in recent history.

Studies show that the stock market typically starts to turn up about six months before the economy recovers. By that measure, I think calling any market bottom here is early, as most experts expect the recession to stretch well into 2009 and maybe even 2010. But with the stock market down 40%, we're certainly a lot closer to the bottom than we used to be.

For what it's worth, I bought into the market yesterday full bore, investing all the cash in my 401(k) account in a diversified portfolio of stocks and bonds. The cash position had been there for about nine months. It wasn't my market-timing genius that put me in cash; I just didn't get around to reinvesting after my last rebalance, and then as the market crumbled, it was a very easy decision to sit on the cash cushion.

I didn't try anything cute: just a diversified mix of U.S. equities, international equities (including emerging markets), and intermediate-term bonds, very similar to my 13.65 basis point portfolio. Ultimately, sticking to a strong, steady asset allocation plan is what will pay off in the end.