>Rational Optimism

>Employment seems to be bottoming, interest rates are low with mortgages at 4.5%, and for now inflation is nonexistent. So in reality the worst is over and we should experience slow growth with 2010 being “OK” until the third quarter. However, investors will have a difficult time profiting from this and here are my top ten reasons.
1. Clients chasing returns from this year’s winners
2. Risk in the market has risen substantially from March 2009 of this year.
3. Investors have become complacent and have not readjusted their allocations to adapt to the risk.
4. Lack of diversification
5. Poor asset allocation
6. Rebalancing portfolios without a discipline
7. Trying to market time
8. Confusion between efficient markets vs. inefficient markets.
9. Financial information causing confusion.
10. Trying to predict the markets.

If you would like more information and clarification you can email me (william.riley@rileyhutto.com) for a copy of the book, “The Lies My Broker Taught Me”.
Let’s go for a trip around the world and I will share my thoughts on where there might be some opportunities for 2010.

East Asia may be the strongest player:
Japan has a budget deficit problem, a huge debt problem. Additionally, its’ interest rates are too low. That being said, it is one of the world’s great export economies and its’ banks are now in decent shape and real estate is fairly priced.
China is still a good play, but watch out for the second half of the year.
Korea and Taiwan both look to be in pretty good shape.
Australia and Indonesia look attractive unless we run into a commodities bubble.
India should do well in the first six months but could face physical issues early fall.

Onward to Europe:
Germany looks great.
I am very disappointed with France.
Forget about Greece and Spain.

North America:
The US will do well in the first half but faces monetary and fiscal crisis in the second part of the year.
Canada will do well will do well in the first half but like Brazil pressure could build in the second half.
Overall good first half of the year and the second half is a tossup.

One final thought, we could see gasoline prices back to the 4 to 5 dollar range by late summer.
The current plan to raise the ethanol additives in gas from 10% to 15% may cause the prices to dramatically increase.
I am currently booking speaking engagements in spring 2010, so if you would like me to speak to your group, please call my office at 817-870-4680.
Become a follower on Twitter at http://twitter.com/rileyhutto to get market insights and updates on the blog.


About Riley Wealth

We’re here to help you achieve your financial goals, manage your money, and make your life better. Our firm is not like most other investment advisors. We are an independent advisory firm, with no ties to a large Wall Street firm. You receive advice unblemished by the conflicts of interest that have plagued Wall Street firms. We are free to recommend the best financial products to help you meet your goals. And with no sales quotas, we can devote the time needed to properly research and monitor your investments. You also benefit from our size. As a boutique advisory serving high-net-worth individuals, every relationship is important to us. With no national ad campaigns, we rely on referrals from people in our community to grow our business. You won’t be treated like just another account number, and there is no corporate bureaucracy when you need an answer about your money. Our staff understands that you expect excellent service.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s