Market Commentary
Has the stock market gotten ahead of itself?
2nd Quarter 2010
With the S&P rallying a remarkable 69% since March 2009 through March 2010, it has caught many investors by surprise. Is the speed and magnitude sustainable? Considering the average rally following a bear market is 46%, does this lead one to react to the notion the rally is a bit overdone?
Investment Implications:
While the best gains normally occur in the first year, many “ball cycles” carry into the second year with moderate results. With this in mind, we continue to advocate:
- Large Company Dividend Producing Stocks
- High Quality Muni’s
- Emerging Markets
- Continue to add to Technology and Biotech
- China will continue to grow but also consider Japan, Brazil and India
- Real Estate [REITS] will improve but slowly
- Our prediction for inflation expectations is early 2011
- The Dollar will strengthen which may have a negative impact on gold but will level off and perhaps fall in Q4, pushing gold higher
- GDP will be low to moderate creating a slow tedious recovery
In the year 2000, the Federal Unfunded Liabilities (the difference between the benefits that have been promised to current and future retirees and what will be collected in dedicated taxes and Medicare) was 20 trillion and at the end of 2009 it was 107 trillion. What do you think it will be after the health care reform takes shape?
Ending Comments:
“When we consider that this government is charged with the external and mutual relations only of these states: That the states themselves have principal care of our person, our property, and our reputation, constituting the great field of human concerns, we may well doubt whether our organization is not too complicated, too expensive; whether offices and officers have not been multiplied unnecessarily and sometimes injuriously to the service they were meant to promote.” [Thomas Jefferson, First Annual Message to Congress 1801]
Securities offered through Triad Advisors. Member FINRA/SIPC