NEW YORK (CNN/Money) - Six months ago it seemed like things could only get better. The economy was on the mend, the war against terror was moving forward and, heck, things had been bad for so long it didn't seem they could get any worse.

They did of course -- much worse.

Meanwhile bulls trot out statistics that are supposed to soothe, like the one about how the Dow hasn't had three down years in a row since 1942. Cold comfort coming from the guys who told you stocks always go up six months after the Fed starts cutting rates. (The Fed's first cut was January last year and the Dow is down, oh, 1,400 points since then.)

"The market never goes down three years in a row? You might as well get a lucky penny and flip it," says Raymond James chief investment strategist Jeff Saut. "The market can do anything it wants to."

Saut's not a huge bear on the market -- he even thinks there could be a decent (if short term) bounce in the weeks to come. But he reckons that people who say they can't imagine things getting worse don't have very good imaginations.

"I have all kinds of worries," he says. "I worry that the economic recovery is going to be a lot weaker than people think. I worry that Musharraf will be assassinated over in Pakistan. I worry about a dirty bomb going off in New York."

The problem, Saut says, is that the risks the market is facing now are so hard to quantify. Lots of people tell us to expect another terrorist attack, for example. But who can say where or what that attack could be? How do you assess that risk and put it into stock prices?

Investor obsession over what might happen geopolitically has gotten downright extreme. Bill Sterling, the chief investment officer of Trilogy Advisors notes a recent conversation with a hedge fund manager who says these days he reads only two things: research from his favorite economist (Ed Hyman at ISI) and DEBKA, the Israeli web site that might best be described as the Drudge Report of terrorism news.

That would be ridiculous, Sterling thinks, except it suggests a world where even supposedly savvy investors are spending more time reacting to rumors than doing the sort of fundamental analysis you might expect.

There are more fundamental concerns too. Jeff Matthews, who runs Connecticut hedge fund Ram Partners, worries mostly about valuation. The major indexes are near their September lows, he points out, and many widely owned stocks, like IBM and General Electric, are even worse off. But there's no extreme event for investors to clutch on to.

"Now people are losing money and they don't have bin Laden to blame," Matthews says. "They're hurting." And, he says, we're approaching the point where people who have been hanging on finally decide to sell. But it's hard to guess who's going to want to buy.

"You never know from one day to the next right now. If it's not the Middle East or terrorism, it's the dollar. If it's not the mounting deficit, it's investor distrust," says Larry Rice, chief investment strategist at Fahnestock. "You could have a tradable rally here, but the ultimate lows are going to have to wait."