Portfolio Management:Leaning To Learning

Though we don't know what will happen tomorrow,we do know what happened today.We are not in a bear market,which is defined as a 20% drop or more;we are in a market correction.We are not in another recession,either;the economy is still growing,although slowly.Corporate earnings have been very good for Q2,with most firms exceeding estimates.These are the fundamental facts.Forget the knee-jerk hysteria of the sell programs that went off today.A good employment report or a supportive gesture from a central bank could set us back on the right track to a healthy market as soon as tomorrow morning.
Until that happens,we need not be sick ourselves because panic was in the financial streets on a given day.We are still the thoughtful people we were when we woke up on the morning of a sell-off.We know that,historically,those who run with the herd at such a time have always lost out in the end.
That doesn't mean it's time to buy.We could be headed for another bear market and recession.In that case,some buying on the way back up would be in order.It just isn't at that point yet.There's a lot to be said for just parking new money in cash for now until the situation is clarified over the next few days and weeks.It may not be exciting,but it is a durable plan.

Oppenheimer Strategist Optimistic About Market

Brian Belski,chief market strategist at Oppenheimer&Co.,says the market overreacted to the Japan events.You have to look back at the Kobe earthquake in 1995.It is positive that the G-7 industrialized nations have intervened to support Japan.
This crisis has not altered our viewpoint.Single digits are still a good way to look at it.This is more of a transition year,a lot more volatile than portfolios are prepared for.
Look at mid-cycle areas that are more domestic-oriented,large-cap high quality companies,more toward domestic industrials that will profit from the problems in Japan.
We are on the precipice of a long term bull market,Mr.Belski believes.
Oppenheimer&Co.,Inc.,a division of Oppenheimer Holdings,is a leading investment bank and full service investment firm.For more than 125 years,they have assisted high net worth investors,businesses and institutions.
Oppenheimer Holdings(OPY)

Advantage View:Evaluating This Bull Market

We are seeing bullish sentiment extremes,and this shows that the bull market is unsustainable,according to Walter Zimmerman,Chief Technical Analyst at United ICAP.We are likley to see the highs for the year this month.Be wary of any sudden moves to the downside.
Everyone is long,waiting for the next rally.Everyone is already in the market.All the mergers are also a sign.It's not just individuals that are bullish.Historically,market tops have been marked by big financial mergers such as the recently announced Deutsche Boerse-NYSE/Euronext or the CME-NYMEX tie-ups.
United ICAP is a technical advisory service and inter-dealer energy broker.It provides analysis to the energy industry,as well as the average trader and investor.

Positives and Negatives

The cyclical positives and secular negatives are in a tug-of-war,in the opinion of Bob Doll,Vice-President and Global Chief Investment Officer of BlackRock.The market is acting a little tired.Volume has shrunk some.Maybe we take a little pause here.I think we'll see a thousand on the S and P-maybe the low hundreds-first,Mr.Doll said.
We are of the view that the recovery will be sub-par,Bob Doll stated.Equities are O.K.,but we're not going to have the normal recovery,given the deleveraging overhang and the reluctant consumer.As for inflation,a lot of the interest rate rise we've been seeing is plain old normalization of rates.The velocity of money has not yet picked up.We have all kinds of unused capacity in areas such as manufacturing and labor,and we have to fill those up before inflation becomes a problem,Bob Doll maintained.