Buckle up. This summer we have started to hit economic data eddies—about stalling manufacturing and job creation, the housing slough, expiration of QE2 (the Federal Reserve’s money-pumping bond-buying program) and the uncertainty of what will come as the economy goes ‘off oxygen.’ And by the way, it is getting harder for companies to meet their profit targets, anyway. You have, I am sure, already heard much about the threat of a double-dip recession, not to mention the consequences of instability in the Middle East, slowdowns in Asia and financial stresses in Europe. We’ll hear even more dire data as the 2012 Presidential race heats up.
All of this will create white water to paddle through. But a so-called double-dip recession, just to take one example, is not inevitable, though neither is the forecast foolhardy. The point to remember is that your money is not invested for a September landing, or even for a 2012 one. You’re travelling further downstream; so stay composed.
Hearing from the pros about what may be ahead contributes to composure. Indeed, hearing directly from the money managers who make decisions about your investments is, I believe, a critical component of a financial advisor’s work. We do this regularly at Allegheny.
In recent weeks, at Allegheny’s annual advisor conference and at a conference of Morningstar, the pre-eminent organization that rates and monitors mutual funds and other investment vehicles, I heard from highly regarded pros managing funds in many of our clients’ portfolios. They included Bill Gross of Pimco Funds, Bruce Berkowitz of Fairholme Funds, Chuck de Lardemelle of IVA Funds, David Nadel of Royce Funds, Cliff Remily of Thornburg Funds, Jim Cullen of Pioneer Cullen Value Fund, Charles Rinaldi of Wells Fargo Advisor Funds, and Larry Auriana of Federated Kaufman Funds.
Here’s a composite summary of what they see for the near future.