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Economic Outlook 2010 - Recommendations |
| For Business Executives |
For Investors |
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Expect: |
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Credit to remain tight |
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Government to impose more hurdles |
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Consumers to remain frugal |
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Elevated level of business failures |
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Strong recovery unlikely |
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Advice: |
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Take advantage of cheap dollar |
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Lock in today's rates but keep debt levels low |
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Seek ways to add value |
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Upgrade talent but don't overhire |
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Start new enterprises to take advantage of business cycle |
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Pockets of strength: |
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Exports |
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Public construction |
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Regulatory Services |
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Environmental services |
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Stocks: |
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Avoid buy and hold, active research needed |
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Be defensive, buy bargains |
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Favor dividend paying stocks |
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Seek the following:
- Lightly regulated
- Government favorites
- High sales overseas
- Basic material
- Technology
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In rallies favor small cap stocks |
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Bonds: |
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Avoid low quality |
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Favor TIPS, high quality GO municipal bonds |
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Use active management: Good opportunities in short run |
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Expect problems in the long run |
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International: |
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Diversify stocks among cheapest/strongest economies |
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Favor: Chile, Peru, China, India |
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Avoid: Australia, Taiwan, Brazil |
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Seek high quality sovereign bonds |
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Important Considerations: |
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A healthy position in gold and silver |
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Non-correlating styles such as Market Neutral, Balanced |
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