I listened in on a conference call with the Chief Investment Strategist from a competing Wall Street firm today. The summary is that his views are very much in line with my own. (I’m not sure if that is good news or not.)
He did make an interesting comment that forecasting is almost impossible right now. An “unprecedented” global financial/credit crisis is being met with an “unprecedented” global government response. Two events that have no precedent make for an extremely difficult equation to solve.
The fact that the last three months have seen the highest volatility in the markets “ever” only adds to the uncertainty. So, while he is confident that over the long term (5+ years) we will recover and prosper, the short term is largely unpredictable.
His opinion is that investors could have a reasonable expectation to profit long-term from equity investments made now. Fixed income continues to offer a very attractive risk/reward mix.