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Good morning. As we wake up the day after the Greeks elected the New Democracy Party, one which continues to tie Greece to the European Union, stock investors are continuing to take a wait-and-see attitude. The European Union along with the European Central Bank continue this “slow train wreck” where there is a lack of economic growth colliding with a mountain of debt (sound familiar?).
We believe that the market will continue its’ choppy action of two steps forward and one step back followed by two steps back and one step forward. However, over the longer term, we believe that the upside outweighs the downside and would therefore look to accumulate equities on weakness.
On the flip side, we believe that the risks outweigh the potential return for bond holders. However, investors need to hold bonds and we would recommend bonds with maturity values less than ten years and sprinkling of U.S. Government Agency, high grade corporate and high yield corporate.