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Thought on the Year Just Past January 7, 2012

Posted by Tom in Thoughts.
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I’ve posted my Client Newsletter with some end of the year thoughts (note it on the newsletter tab page above this post).  I had a bunch of things to review, but wanted to keep the newsletter short and to the point . . . Yes, I do value people’s time.  🙂

So no duplications in this post, but rather I’ll cover a few things that I didn’t have room for.  Here we go:

New home sales are still very poor, but the light at the end of the tunnel is that the supply of new homes (unsold) is finally dropping.  That’s a first step toward the construction industry recovery.

And how is the average American reacting to the market volatility of the past year (that gained nothing) ?  With a substantial out flow since August of last year.  If you’re a contrarian, that’s a sign of a bottom, when everyone has sold.

Think the US has had it bad?  Look closely and you’ll see that currently we’re one of the few major world economies that is actually Expanding and not Contracting.

What to expect in 2011?  My guess is more of the same volatility, driven by news events.  The markets are nervous, so it doesn’t take much for major players to sell first and analyse later.  More of the “Muddle Through” economy.  Slow improvement (we hope), and very sector specific.  Performance of broad holding mutual & pension funds will be poor.  I’m very concerned about Bonds as the economy slowly improves.  The good news is we should get plenty of warning as Bond prices slide (& interest rates increase).  Rates have to go up, the question is when & how fast.

That’s it for now.  Have a good week and post a comment back to me . . . always good to hear from readers (just click on the ‘Comment’ tab at the bottom of this post.  Cheers !      …….. Tom ………

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