Terril In The News
Three major issues now dominate the climate for investments. The first is the earthquake in Japan and possible nuclear accident. For investments this issue is short term (two months) negative and longer term positive. Look for Japan to re-build bigger and better. Technology will benefit as Japan modernizes as they re-build.
The second issue is the Middle East. This is difficult to predict. If citizens of countries currently ruled by dictators, can gain some type of economic and personal freedom, it is a major positive for investments. To accomplish the noble goal of freedom, the flow of oil from the Middle East may be interrupted. If oil prices go to $140 a barrel or higher it will be a major problem for investments. The movement to freedom is a major long term positive. We hope the movement can happen without major bloodshed and economic upheaval. This is a very difficult event to predict. We believe the best solution is to sell investments with a negative outlook of higher energy prices.
The third issue is the risk of higher inflation, due to the reckless policy of the Federal Reserve Bank of the U.S. . This third issue is more dangerous than the other two issues. As each day goes by with the Fed unchanged in their policy, we are moving towards the bearish camp. Higher world wide dollar inflation can kill the economic recovery.
With the above three issues considered, for the moment, we remain bullish on stocks, negative on the U.S. dollar, negative on domestic bonds and bullish on gold and other commodities. We are on constant Fed watch. It is not too late for the Fed to avoid a major inflationary event. If they remain reckless, we may change our outlook for investments quickly