With all the news circulating about the Fed’s decision on cutting rates for the third time in a row, is the economy really based on the Federal Reserve or companies blowing away earnings estimates provided by analysts? Right now it seems like it’s heavily dependent on the Fed. The complete lack of confidence in the market is creating a lot more controversy than the whole mortgage mess. I think that there’s about 600-800 points of pure speculation embedded in the Dow right now. Usually when people think of the American stock market and economy, they think of the purest form of separation of government and business.

But does this situation erase the line in the sand and mix the two together? I am starting to think that it is. It feels like a complete bail out of companies that really don’t deserve to still be around. The major companies that have suffered were in the business to make money out of thin air. Did they really think they would make money off of a consumer that can’t even pay for the minimum payments on their credit cards? Come on now! And those are the idiots the Fed is trying to save…

I am sure our country would be perfectly fine with the total disappearance of some of these companies. When you play with fire, your ass will get burned most of the time. The companies playing around with crappy mortgage portfolios deserve what they got. If I went to a casino and bet all my money on red and the ball lands on black, am I allowed to complain and try to get my money back? I could, but the manager would tell me it was my fault for gambling.

Where should we invest our money to get ahead of the game? I think we should play the market in a 10-12 stock portfolio. You need to have some consistent growers like (Kroger, (KR), Coke (KO), Costco (COST), and some that will deliver constant dividends Pengrowth (PGH), Bank of America (BAC), Unilever (UN). After the portfolio has a strong foundation, you can pick some good performers over the long-haul. I like Wainwright Bank (WAIN), Adobe (ADBE), Honda (HMC) and Hologic (HOLX). Those stocks have some varied fluctuation, but have a strong long-term performance. Your portfolio is almost complete, but it’s still missing a few more stocks to really make it happen. I am still on the E*Trade (ETFC) bandwagon even after all the news. Does this make me a hypocrite because of what I said before? Maybe a little, but their main business is still very strong and their cash infusion will certainly help. Here are some picks of my favorite movers and shakers: Nintendo (NTDOY.PK), Suncor Energy (SU), and ValueClick (VCLK).

No matter how you end up playing this wild market, keep your eye on the long-term and remember that the stuff in between is almost like an illusion. The next year might be scary, but I think that this market will end up producing a lot of rich people. Do you want to be part of the pack or sit on the sidelines with your best friend Mr. Mutual Fund?