Another slightly positive month as the equity markets continue to exceed fundamentals. The S&P 500, which I use as a proxy for broader equity markets, has battled all month to remain above 1200 and appears to have won this month. Earnings reports to date have been better than expected, in fact, at last count over 80% of the S&P 500 constituents have beaten estimates which is a record. However, top line revenue growth remains problematic. Companies can only cut costs so far before top line growth becomes necessary to sustain earnings growth.
Bottom line, we're still concerned about domestic equity markets correcting during 2010. It may be a decline in equity prices or it may be a flat-lining of the index over the remaining 7 months. Either way, something close to fair value would be achieved if earnings continue to improve and the S&P stays near 1200. We're still skeptical and still hedging our domestic exposure and even considering reducing it somewhat in the near future.
Issues in Greece, Portugal and Spain are not surprising to us and we won't be surprised if Italy and Ireland join the party. Deficit spending is unsustainable. Eventually, the bills must be paid. There will be ramifications for the countries in question and for the Euro (likely to continue trending lower relative to the dollar). We do like other markets though, in particular emerging markets. We'll discuss further below.
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High Conviction
Seeking Alpha
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 I have recently written an article published on Seeking Alpha. I am a fan of emerging markets currently. I believe they have stronger balance sheets, better growth potential, and more disciplined monetary and fiscal policy. The result is potentially better investment opportunities.
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Get on Track
With Your Own Roadmap
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 I've written before about the need to understand where you are to know where you want to go. This is simple - just as you follow directions to get from point A to point B, it is necessary to establish your current position to map your route to your goals. I've joined forces with a new organization to help clients build their own roadmap. I believe you'll find the process rewarding and look forward to working with you.
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