Investor Agenda

Is The Worst Behind Us?

As we get closer to the midpoint of the year and the stock market remains relatively strong, investors everywhere want to know the same thing: Is the worst behind us?

For some important thoughts on that question, let me share with you what I recently learned at a gathering of some of the biggest investors and leading CEOs in the world.

Before my trip to Russia (which you can read about here), I had the good fortune to travel to Seattle, where I spent a few days at a private event talking with this group of elite investors and CEOs. I was able to gain a real sense of what they are thinking right now, which is the kind of information I want to share with you in this blog and in some other new ventures that you will hear more about very soon.

I can tell you that, even though the stock market has bounced more than 30% since the March bottom, these business and investing leaders were nervous about the government’s decisions regarding businesses as part of the effort to stimulate the economy. They were particularly concerned about the tax treatment of international profits, which I believe is an extremely important issue and will continue to cover it closely for you.

They were certainly feeling better than at the beginning of the year, but the consensus was that we may “bump along the bottom” for some time before seeing a real turn up in business and job creation. The expectation is that unemployment will actually worsen over the short term, perhaps nipping into double-digit territory later this year or early next.

An Important Time

I also believe that the economic picture is improving but that we still have a ways to go before the recession and its effects are behind us. In that regard, the third quarter is shaping up to be critical because most economists believe it will mark the beginning of the end of the recession.

In fact, a recent survey showed that a full 90 percent of economists expect the economy to emerge from the recession in the second half of the year.

We all hope that will be the case, and it should provide a solid opportunity for investors to profit.

As the coming weeks and months unfold, we will look at the sectors and companies that are likely to lead the way and talk about stocks to buy to capitalize on what should be better times ahead.

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