Gregor Schuster | Photographer's Choice | Getty Images

Employment data were really good last week, and while it is just a single report, it was a very good report.

Headlines this week are breathlessly devoted to all things Greek and European. In spite of rising share prices, there is no good outcome for Greece or the Euro short of survival.

Though mere survival is preferable to vast numbers of alternatives, we find it a tough formula for ebullience.

Back home in the US, Consumer Credit surged in December, which means that the savings rate declined and debt increased. Many consumers have once again returned to deficit spending after a brief interlude of responsibility. The US economic recovery is continuing its slow recovery fueled in part by a renewed willingness to take on debt. For my part, I continue to believe that the consumer is not doing enough to get his financial house in order and save more for retirement. Savings rates are still more likely to drift higher over the near- to intermediate term, which could be a drag on economic growth for some time.

Michael Farr
President
Farr, Miller & Washington,
LLC

No matter one’s perspective, we are unable to consider current market conditions vibrant or robust. The economy is blessedly far from its earlier state of extremis but nowhere near ready to run the New York Marathon. While we are grateful to see the patient upgraded from the Intensive Care Unit to a standard nursing floor, it seems that even the most biased, loving relative would struggle to suggest our economy is fit for calisthenics or active duty.

The good news is that as a result of this tentative fragility, share prices for many companies are quite reasonable. When news is bad, share prices are low, and that presents opportunities to buy. There is money to be made by the disciplined investor.

Politics were the theme yesterday at lunch with Potomac Research Group’s Greg Valliere and cocktails with Mary Matalin and James Carville. Greg Valliere is one of the very few strategists I read daily. His daily report is brief, to the point, and enlightening. Greg has been forecasting Mitt Romney as the Republican candidate for some time. He has also correctly predicted Newt’s passing allure and Santorum’s rally.

Matalin and Carville agreed on many of the facts of the Republican campaign and of President Obama’s chances for reelection. They point out that Republicans always go with the front runner. Carville says that Romney will be the candidate but that Romney can’t beat Obama. He suggests that only Obama can beat Obama and that that is a real possibility.

Greg Valliere and I agree that among the greatest threats to the economy and investors in the years ahead is losing the Federal Reserve’s independence. Greg quipped, “we’ve seen how well Congress has handled fiscal policy; how well do we really think they’ll do with monetary policy?”

Enthusiasm is building as the market has increased almost 20% since September 30, 2011. It is uncanny how investors’ appetite for risk increases as risk increases. Technical chart patterns remain strong, but my hint of lumbago makes me think we are due for a pause. Investment opportunities are available for those willing to put in the work. Do your homework and watch where you step. This is not a riskless period. Period!

Michael K. Farr is President and majority owner of investment management firm Farr, Miller & Washington, LLC in Washington, D.C.  Mr. Farr is a Contributor for CNBC television, and he is quoted regularly in the Wall Street Journal, Businessweek, USA Today, and many other publications. He has been in the investment business for over twenty years.