"Ah, the fruits of a society where the sense of morality has been replaced with a swollen sense of entitlement. I hope people are starting to wake up. Anyone with half a brain should be watching in horror as the current administration is trying to take us down this Socialist road to hell. No matter how many times it has been tried, Socialism does not, and will not work. "
~ D Mangus.
The Professional Opinion
DJIA Index: 8168.12
The stock market is attractive for purchase during periods of weakness. Interest rates are expected to remain low and inflation is expected to remain well under control. An expected earnings recover in 2010 should push the S&P 500 into the 1000-1100 range.
Real GDP growth would come in at 2-3%
Bob thinks the final closing lows for this cyclical bear were registered in the ides of March and that now we are in the beginning stages of a cyclical bull market and this will carry into next year. If all this happens, you should expect to see large gains to the upside.
The Leading Index of Economic Indicators has not improved much at all but this index should improve during the summer season. When these indicators improve, economic activity should also start picking up.
Consumers and their ability to consume is critical to an economic recovery because consumer spending accounts for 70% of all economic activity. Tax breaks and other forms of stimulus should help this situation. That, in conjunction with reducing the backlog
of housing to the point that new homes need to be constructed again, also needs to happen.
Real GDP growth is expected to improve slightly in the third and fourth quarters of this year. A modest contraction during this second quarter is not out of the realm of reasonable expectation.
"Looking at the present market situation, we believe we are in the second cyclical bull market of the secular bear mega trend that began in March of 2000, as measured by the S&P 500 index. We expect the market to make excellent progress into next year. This is the reason we are maintaining a fully invested position in our model portfolios. We continue to rate the market attractive for purchase on weakness."
For the first time in years, Bob has added a new stock to the list - SUNCOR (SU). I am familiar with that one. He views this as a hedge for protecting the portfolio against rising oil prices in the future. He emphasizes that individual stocks should comprise no more than 4% of an equity portfolio.
DIA, IWV, SPY and VTI are all rated buy during periods of weakness.
Stay fully invested and add to your positions during periods of weakness.
Frogs at the Monterrey Bay Aquarium