Commentary for October 22, 2009

Dow 10,000 appears to be acting as a magnet with, on the one hand investors are concerned that stocks have run up too far too fast and on the other hand, afraid that they will miss out on another leg up.  As we have noted time and time again, the move up to where we are now is a recovery from the panic that had set in during Q4 of 2008 and Q1 2009.  From this point on, we will have to earn our “stripes.”  As far as we can see, earnings season thus far has been a pleasant surprise.  Sure, revenue growth has been nil, but earnings growth has far exceeded expectations.  We believe that revenue growth will come over the next quarter or two and that investors would be wise to add to positions in individual stocks or equity-based mutual funds (both domestic and international) on weakness.

Regarding bond investing, use pullbacks in your favorite bond funds if they are government agency, municipal or corporate bonds to add.  That said, continue to be wary of long-term bond funds of any ilk.

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