Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

Of course they can. But they can also get much better. While the stock market, as measured by the Dow Jones Industrial Average, has rallied from its lows, can it sustain the gain or will investors take this opportunity to reap smaller losses (who has profits these days?) or step up and buy? Here's what will influence them.

It seems all economic news is bad. "Credit crunch" is more common than Captain Crunch around the breakfast table. Banks are hemorraging from bad loans. They're reluctant to make new ones unless the credit is so good and the loan so small that it would be impossible to lose money on it. Most likely the best terms are for those borrowers who deposit all the money they need in the bank first, then borrow it back, but not all of it. The banks want that extra cushion of safety these days. Don't look for the banks to change lending habits soon. More losses are coming. Until they stop, banks will keep credit tight.

The Federal Reserve Chairman is making more money available, loosening up borrowing requirements, injecting cash into the economy. There's money to be had for mortgages and building. But the Fed can't make the banks lend the money. It can put pressure on the banks to lend, to make better loans, but it can't make the banks put out the money. Any banker can resist by saying it is prudent to be restrained in these difficult times. Prudence can never be reprimanded by the Fed. As I've written before, the Fed can't be blamed for this problem. Greedy bankers can. As such, the bankers have to pay the price, take the losses for their bad loans. Those losses haven't been totaled yet.

The housing market is showing a little bit of stability. Latest figures show that sales of existing homes were up slightly in February, the first time in 7 months, as reported by the National Association of Realtors. Resales of U.S. homes and condos rose 2.9% to a seasonally adjusted annualized rate of 5.03 million, ahead of the 4.85 million pace expected by economists surveyed by MarketWatch, the strongest sales pace since last October. But sales are still down almost 24% compared to the same period last year. Inventories of unsold homes fell 3% to 4.03 million, representing a 9.6-month supply at the February sales pace. Inventories are not seasonally adjusted, but a decline from January to February is unusual. 3 out of the 4 regions (the West was the exception) showed rising sales: 11.3% in the Northeast, 2.5% in the Midwest, and 2.1% in the South. In the West, sales were down 1.1%. Yes, the word was rising. A little bit of good news.

Oil and food prices are some more bad news. Oil isn't going down dramatically even with its recent pullback from all-time highs. Demand from India and China isn't abating, not yet anyway. Normal economic reality will hit these countries and slow them down. But not now. In the meantime, investors are buying companies that make lithium batteries, convert wind to energy and make corn into flammable liquid.

That's another issue: corn is in great demand for food as well as fuel. It's not coming down in price anytime soon either, though studies show that the "eco" benefits of this program as questionable given the cost of processing, transportation and other costs to get it to the pump. Investors like seed producers and farm equipment makers when they think of opportunities in the ag sectors.

Summing up: everything looks pretty bad. But so are stock prices. Investors have known these particulars for some time. They're not focused on today. They're looking forward to six months or a year from now. They want to be in the market for the positive news that will surely come. When? No one knows, but we're closer to it now that the Fed and the government are looking at ways to solve the problems. I know, I know, we're from the government, and we're here to help is never the answer. But providing more credit, absorbing more mortgages, and changing taxes or policies to help will be a short term boon to the market. And it doesn't matter which candidate wins, both parties will focus on this huge housing problem. It's one of the important cylinders in the economic engine, which by the way is not diesel.

The market could very well go lower, based on all the bad news. But most of that is yesterday's. As we muddle out of the mess, look for the market to respond more favorably than expected when something good happens. It's gone down much further than anyone would have guessed on the bad.