1Q10 IWM Investment Insights Newsletter

The first quarter of 2010 was a good one, with U.S. stocks enjoying healthy gains and bonds earning at least small positive returns.

 The main macro economic story is the need to reduce spending now, in order to reduce the massive debt built up in previous years. This suggests the strong possibility of a sluggish economy for many years to come.

 We believe that risk assets like stocks are not priced attractively enough to fully compensate investors for the risks we see, and therefore we are under-allocated to equities in all of our model portfolios. However, periodic market declines in the years ahead could give us opportunities to improve returns by adding risk assets when we expect to be paid better for taking on more risk, but this will require patience.  Read more…

June 9, 2010 In: Quarterly Newsletters & Planning Alerts Comments (None)