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03.24.2010 / Market Analysis, Posting by Stephen Frantz, FNBO Chief Investment Officer.

As we observe the anniversary of the market lows reached just over a year ago, perhaps it is appropriate to take time to reflect. After breathing a collective sigh of relief following the markets rally off their multi year lows, we marvel at how far we have come over the last 12 months. One year later, we wonder what is the new normal?

"One year later, we wonder what is the new normal?"

Despite pretty significant headwinds, the economy is showing signs of strength. We would expect 2010 to be a year for growth in the US economy, albeit at a slower pace than most post-recession recoveries of 3-5%. Stocks look reasonably valued by most of the measures that we follow. Bonds are certainly expensive, particularly Government Bonds.
 
There’s an old adage in our business, “don’t fight the Fed.” The Federal Reserve, through monetary policy, wants people to take on some level of risk to reignite our economy, and is punishing those who choose to be safe. In this environment, we continue to favor stocks over bonds, although with somewhat modest expectations.

Join in.  Tell us what you think.

Comments are provided as general market commentary and should not be considered investment advice or predictive of any future market performance.  Past performance does not guarantee future results.

Investments are: Not FDIC Insured • May Go Down in Value • Not a Deposit • Not Guaranteed By the Bank • Not Insured By Any Federal Government Agency

Posted at 01:27 PM | Permalink
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