If you're an investor, mispriced assets should make you happy. When stocks are too low, it's exciting (Buy!). When stocks are too high, it's exciting (Sell! or Sell short!). But when an asset is priced just right, you're left twiddling your thumbs or, worse, trying to find reasons to buy or sell anyway.

On Thursday, the S&P 500 marched tantalizingly close to 1,000 for the first time since November. But to many investors, all the recent good news has made the investing climate decidedly boring.

In a recent commentary (the S&P was at 950), GMO's Jeremy Grantham wrote that stocks and other assets "have all — or almost all — converged for a few unusual moments at fair value…It's difficult to be inspired." When I spoke yesterday with Mark Freeman, a portfolio manager at Westwood Management, he struggled to point to asset classes that investors could turn to for easy profits. "A lot of the market's mispricing has been taken out in the rally," he lamented.

Admittedly, some investors still feel strongly that the market's not going to hang around 1,000 for long. PIMCO's Bill Gross wrote today that the U.S. economy risks a permanently higher employment rate which would dampen stock prices. At the other end of the spectrum, Legg Mason's Bill Miller says, "I think bargains abound in the U.S. stock market." In March, keep in mind that nearly all of these guys agreed that the stock market looked attractive. If nothing else, we've lost that consensus.

At 1,000, the market's price/earnings ratio based on 10-year normalized earnings (which smooths out earnings bubbles and busts) stood at 17 — nowhere near its highs in 2006, but already above its historic average of about 16. Historically, when you've bought stocks at this level, the annualized return over the next 10 years has been about 6%. That's not bad, but it's not particularly exciting either.

So what can you do? For one, if you wisely decided to boost your equity stake a few months ago, as we recommended in February, now's a good time to go back to your standard allocation. If you don't know what that should be, use our Asset Allocation wizard. Don't go too far and make a bet that the stock market's going to drop to new lows. With the market floating at a price that's about fair, about the only thing that we can be sure of is…well…nothing.

Bloggers are buzzing over what one writer has called "Taibbi's Scream" — that is, Rolling Stone writer Matt Taibbi's muckraking takedown of Goldman Sachs in the latest issue of that magazine.

Well, "muckraking" isn't perhaps the best word for it, for Taibbi doesn't so much rake the muck as fling it. The article starts off, after all, by describing the investment bank as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." In the rest of the article, which is full of such invective, Taibbi argues that Goldman Sachs was at the center of — and a prime beneficiary of — every financial bubble in America from the market crash of 1929, to our millennial Internet madness, through the housing market collapse and the subsequent bailout. Heck, he even blames the firm for a bubble that doesn't yet exist: what he foresees as the cap-and-trade boom and bust.

Goldman's devious formula "is relatively simple," writes Taibbi. "Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again."

Goldman, naturally, has denounced Taibbi's article as "hysterical," a "compilation of just about every conspiracy theory ever dreamed up about Goldman Sachs." Unfortunately, that's not too far from the truth. It's not that Taibbi's article is a collection of lies; it's, that, like most conspiracy theorists, Taibbi dramatically exaggerates Goldman's role in all the bubbles, and, perhaps more importantly, exaggerates the firms supposed omniscience. Like most Wall Street firms, Goldman has done plenty of sleazy stuff over the years, but Goldmanites aren't the diabolical masterminds Taibbi thinks they are, creating and deflating bubbles at will and cackling with glee as they rip off the rest of us.

You can find excerpts of Taibbi's screed on RollingStone.com, but if you're really interested you should probably read the whole thing in the magazine. (Look for the Jonas Brothers on the cover.)

If, however, you're looking for a more sophisticated — and ultimately much more enlightening — look at the financial skullduggery behind our current crisis, you'd do far better to turn to Michael Lewis's take on the AIG collapse in the latest Vanity Fair. (You can find the whole thing here.)

"Nearly a year after perhaps the most sensational corporate collapse in the history of finance, a collapse that, without the intervention of the government, would have led to the bankruptcy of every major American financial institution, plus a lot of foreign ones, too, A.I.G.’s losses and the trades that led to them still haven’t been properly explained," Lewis notes. His article is an attempt to explain just what happened. A onetime bond trader salesman who's been a perceptive writer on the money culture for decades, Lewis talked to those who'd been there at ground zero, at AIG's Financial Products division.

The story that he tells is a complicated one, impossible to easily summarize; even the villain at the center of it all, former AIG FP head Joe Cassano, turns out to be more of an egotistical jerk than a diabolical mastermind — as trapped as anyone else in the bubble he helped create. Though Taibbi may find it hard to believe, that's how it usually is.

The stock market's huge bounce yesterday was its best performance in months. But by now, you know that a one-day rally isn't something to hang your hat on in a bear market. Even with Tuesday's surge, the Dow is off more than 50% since it peaked in October 2007. 

Here is something to think about, however. This month, Jeremy Grantham, chief investment strategist at GMO, who has long been bearish on stocks, wrote that now is not the time to sit on the sidelines. He argues that the fair value for the S&P 500 is 900. After yesterday's close, the blue-chip index sits at 720. "Global equities are even cheaper," he says.

There's no way to know if Grantham is correct. Even he is unsure of when stocks will hit bottom. Grantham, for example, shifted cash into stocks back in October, well before the market hit fresh lows this year. But he also didn't bet everything at once. "We made one very large reinvestment move in October…and we have a schedule for further moves contingent on future market declines," he says.

This kind of calculated, measured return to stocks is critical, Grantham says. Otherwise, "paralysis" can lead you to miss the true rallies that follow a bear's bottom. And diving in all at once can send you into breathless shock.

You can't risk money in stocks that you'll need to cover short-term expenses, like an emergency savings fund or your son's tuition next fall. But you'll want a plan for the rest of your portfolio. As Grantham points out, stocks jumped 105% in six months in 1933–well before the layoffs subsided and bank failures stopped.

–Carolyn Bigda

Boy, there's a lot of depressing news out there today. The number of Americans who are are underinsured when it comes to health care has exploded over the past few years, a trend that threatens to raise health care costs for those who have decent amounts of health insurance. General Motors' auditors say there's "substantial doubt" the company can continue as a going concern. More than 11% of all mortgages are delinquent or in foreclosure, according to a trade group's report.

That got me looking for something—anything—to cheer me up. I didn't find any help in today's economic news, but I did find a ray of sunshine at The Big Picture, the excellent blog of Barry Ritholtz, director of research at Fusion IQ (and a guy who is rarely accused of painting unjustifiably rosy pictures of the market). He points out in a recent posting that retracing 12-year-lows in the Dow Jones industrial average, such as has been our recent privilege to see, is an extremely rare occurrence, having happened only twice before: in 1932 and in 1974. In both cases, the low marked the end of that era's bear market (in 1974, almost immediately; in 1932, within about three months).

Now, as Ritholtz points out, this doesn't prove the end of the bear market. Nor does it mean the economy will stop contracting and unemployment will stop rising. Two prior examples don't make for a sufficient sample. And why should 12 be a magic number? But, as Ritholtz says, the situation "does present a real possibility of a strong market rally."

That's enough to cheer me up for a few hours, at least (even though, as I read this, the Dow is down another 200 points on Thursday). Can anyone else come up with optimistic straws to grasp at? Anyone?