Historically, the stock market has been a fairly reliable leading indicator of economic cycles. Considering the powerful rally since the March lows, one wonders if Wall Street forecasters and economists alike won't be wrong again. Almost every article discussing the strength of the recovery currently predicts either a mild one or a double-dip, i.e. another recession around the corner. In light of these pundits' track record in predicting the last downturn, we'd bet on the sharp recovery if we were of the betting kind. The reality is that, in contrast to most investment professionals, we don't claim to know.
 
We would venture, though, that since inflation expectations are currently low, in line with the slow recovery or double dip consensus, it is probably a good time to be concerned. Make sure that your portfolio is adequately diversified if inflation comes back.  Some investments that have traditionally done better in inflationary environments for US based investors, namely natural resources, real estate, and foreign securities (See article from Warren Buffett below), may be attractively priced today.
 
Whether the economy recovers slowly or sharply is largely out of our control. Our selection of articles brings you some food for thought about things that you can control in your investing life. Focus on these rather than the future direction of the economy.