Happy New Year!
As we welcome 2011 we have been surprised at the positive tone of not only the capital markets, but economists forecasts as well. In a way, perception becoming reality may be the reason, but this may not last all year.
While we live by a glass half full mantra, we also find it helpful to keep our heads out of the clouds, (and sand for that matter.) Last year as we entered the new year (2010) we were surprised at the negative tone from market participants and also economic forecasts as well.
Double dip, re-recession, and commercial real estate fall out filled the airwaves last year at this time, mostly all unwarranted and never to transpire. We threw caution to the negative tone and repeatedly mentioned economic growth would continue, in our opinion.
In Dr. Gekyl and Mr. Hyde like fashion, suddenly we are all clear according to many forecasters and the green light is on for a terrific year.
Not so fast!
It is good to keep our candor about us through good times and bad. While we do believe a continued growth in economics is in the cards, a 20% growth year, which we have heard repeatedly, may be a bit too optimistic.
Later this year we will bump up against hard comparisons, which will in turn give the appearance of a slower growth period, even as the economy may continue to grow at a good pace.
What does it all mean?
It is always a good idea not to get too positive or too negative as it is usually never that extreme. Staying disciplined, especially when others are being overly optimistic (or negative) is an investor’s best friend!
Have a Great Day!
JK
