Fear.

I feel like Johnny Carson when "Carnac the Magnificent" used to answer questions before Ed McMahon would even ask them. You young people, ask your parents about that.

I know that is the question you want me to answer: "Howie, what in the %#& is happening?"

Fear. That's what I think it is.

I like fear. I don't want to be the one who is fearful, of course, but I like it when others are afraid.

Sometimes one can take advantage of fear. Investor Warren Buffett says something like: "Be greedy when others are fearful and fearful when others are greedy."

Ain't nobody greedy now so I'm betting on fearful.

Just remember the most important thing: I don't know any more than anyone else.

Billions and billions of dollars are flowing into bonds. I read that there is somewhere around $3 trillion in money market funds and maybe twice that in bank CDs and the like. Remember that money is not earning anything.

The headlines are horrible. How about the oil spill? How about Europe? What about one of the world's most trusted car companies, Toyota? The economy? The Dow's worst May since the 1940s?

By the way, the EAFE index of foreign stock markets is down more than 13 percent so far in 2010.

There are about a million reasons not to be an investor right now. So where are you?

Looking at commodities, the DJ-UBS Commodity index is down almost 10 percent for the year. Crude oil is down a little under 7 percent, Natural gas is down 22 percent, but gold is up 10 percent.

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Continuing with the bad news, we should have gone away. "Sell in May and go away." Remember, I wrote about that last month.

The problem was that it has only worked two-thirds of the time. What if this was a one-third? It was not.

The market as measured by the Dow Jones industrial average was down 7.9 percent in May and is now down 2.8 percent for the year to date. You thought it was worse, didn't you?

The Standard and Poor's 500 is down 2.3 percent and the Nasdaq Composite is down less than 1 percent. By the way, I am measuring the year to date performance numbers from Jan. 1 through May 31.

The Russell 2000 index of smaller stocks is up 5.8 percent. Yes, I said up. The S and P Midcap 400 Index of midsized companies is up 5 percent. Yea, up. The Wilshire 5000, which measures most stocks traded, is just about flat.

So, what do we have here?

We have really bad headlines and the market is flat. I think this is interesting. People are buying bonds and hoarding cash. Wonder what in the world is going to happen?

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I read, the other day about this financial adviser who has about 250 accounts, very similar to the number I have. Anyway, remember the huge 900 points down couple of crazy days? He said he got more than 50 calls from his clients, and it took him a couple of weeks to return them.

During those two days I was kinda out of touch. Someone showed up and said, "Hey Howie, did you know the markets are getting crushed?"

I, of course, had no clue so I called my assistant on the cell and asked her how many calls had we gotten.

She said, "None."

It was kind of a silly call to her, really. I already knew what she would say. If, by slim chance we had gotten any calls, she would have been on the horn yelling at me. She wasn't, hence I knew.

Now this is not a story about me being a miracle worker. It is a story about my clients being reasonable people with long-term objectives more worried about what the world is going to be like in five years and not the next five minutes. I give them credit.

But don't think I never get a concerned call. I did get one the other day. I just told him that I thought it was time to be buying something and not the time to be selling.

Now we are not going to know for some time whether I was right, are we? I like fear.

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Some so-called friend sent me a birthday greeting the other day pointing out that I had lived 23,013 days. Go ahead and do the numbers if you have to.

I told my wife that number.

A few minutes later from the other room came the exclamation that I had also lived more than 33 million minutes and more than 1.9 billion seconds.

I don't think she's funny.

Howie Pentony is a Saxonburg client portfolio manager.