Financial Times (May 23)
Bonds are in. Stocks are out. “Institutional investors, from pension funds to mutual funds sold directly to the public, have slashed holdings in the past decade. Stocks have not been so far out of favour for half a century.” The penchant for bonds could reverse. Or “the end of a six-decade passion for equities could lead to a less flexible, more conservative model of corporate financing.”
Wall Street Journal (August 8)
The sky is not falling according to Burton G. Malkiel, a former Princeton professor and author of “A Random Walk Down Wall Street.” In the U.S., “the headwinds restraining the economy are many” and further complications arise because “Europe has not really fixed its economic problems.” Still, Malkiel doesn’t believe this is a good time to sell. Valuations are likely to climb in the future. Stocks are currently cheap in terms of P/E ratios and the results of many U.S. corporations are driven less by what happens in Japan, Europe and the U.S., than by sales in emerging markets. “My advice for investors is to stay the course.”
