Walls of Worry

Record home foreclosures, high unemployment, massive municipal defaults, unrest in Egypt, record federal budget deficits, European debt concerns, higher interest rates, and rising inflation in China and emerging markets. Is there enough for investors to worry about?

Yes-and then some! There usually is plenty to worry about and it seems like there is always another market risk around the corner. We know this and filter these headlines along with all the other market data and will adjust your allocations when we see concerns, or should I say opportunities. This is a good time to take stock of your risk tolerance, while keeping the long-term view in mind.

Old time Wall Streeters like to use the phrase “climbing the walls of worry” and that is just what the stock market is doing-for some very good reasons. Corporate profits have remained very strong and companies are slowly beginning to hire again. State and local governments are tightening their budgets and tax revenues are up again, signs that they are returning to financial stability. The U.S. and Europe are beginning the journey of restructuring and paying down the high debt level incurred by the financial crisis. Even though interest rates are rising in the emerging world, you have to remember that this means that their engine is running at high speed and the only way to slow it down is to raise rates. Do not forget that 10 years from now China and the other emerging markets will still be the dominant investment theme.inflatable water slides

There are plenty of worries to climb but the global economic recovery remains intact. Keep your eye on the long-term goal (the peak) and keep climbing!

Bob